Wednesday August 01, 2012
by Gavin Graham, contributing editor Internet Wealth BuilderWhile gold bullion is rebounding, many gold stocks have been heavily sold down. But not all the miners are in the dumps. Gold and precious metals royalty company
Franco-Nevada (
FNV) has increased 23% so far this year.
The royalty model whereby a company earns a percentage of the revenues from several different mines gives firms like Franco-Nevada wide geographical and operating exposure and leverage to rising precious metal prices without any downside from rising mining costs or environmental liabilities.
Franco-Nevada spent $110 million on new investments in the quarter, the largest of which was $35 million for a net smelter royalty of 2.25% on Lake Shore Gold's Timmins West complex and an additional C$15 million for 10 million shares in the company.
The company continues to deliver growth not merely in revenues and earnings but also in its dividend.
For the first quarter, to March 31, Franco-Nevada reported record revenue with 44% growth to $105 million (the company reports in U.S. currency). That was up from $73.1 million the year before.
Earnings increased by 121% to $46.8 million ($0.33 per share) from $21.2 million ($0.18 per share) last year. The company raised its monthly dividend for the fifth year in a row to $0.05 a share (a 25% hike) or $0.60 annually. The stock remains a buy.
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