Franco-Nevada (NYSE:FNV) Posts Quarterly Earnings Results

Franco-Nevada (NYSE:FNV) (TSE:FNV) issued its quarterly earnings data on Tuesday. The basic materials company reported $2.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.09 by $0.29, Zacks reports. The company had revenue of $650.70 million for the quarter, compared to analyst estimates of $634.43 million. Franco-Nevada had a return on equity of 15.62% and a net margin of 61.01%.The business’s quarterly revenue was up 76.6% compared to the same quarter last year. During the same quarter last year, the company posted $1.07 earnings per share.

Here are the key takeaways from Franco-Nevada’s conference call:

• The shareholders approved all formal items, including the election of nine directors, appointment of PwC as auditor, and the say-on-pay advisory resolution, with preliminary results showing strong support in the high 90s.
• Management reiterated Franco-Nevada’s long-term track record of profitable growth, citing 18 years as a public company with roughly 12x revenue growth, 14x EBITDA cash flow growth, and 19 consecutive annual dividend increases.
• The company highlighted a strong five-year growth outlook through 2030, projecting 40%–50% portfolio growth assuming Cobre Panama returns, with additional long-term optionality that could add about 220,000 GEOs of annual production.
• Executives emphasized the value of the asset base, saying the gold inventory they can currently see is worth about $124 billion at today’s gold prices versus a market cap/enterprise value around $44 billion, suggesting substantial embedded upside.
• Management pointed to several large optionality-driven projects as underappreciated assets, including Ring of Fire and New Prosperity, and said the company remains open to more energy deals because oil royalties have performed well and provide diversification.

Franco-Nevada Stock Performance

FNV traded up $3.76 during trading on Wednesday, reaching $240.76. The company’s stock had a trading volume of 420,623 shares, compared to its average volume of 860,366. Franco-Nevada has a 52-week low of $152.89 and a 52-week high of $285.67. The company’s fifty day moving average price is $247.89 and its 200-day moving average price is $230.76. The company has a market capitalization of $46.43 billion, a price-to-earnings ratio of 41.82, a price-to-earnings-growth ratio of 2.30 and a beta of 0.34.

Franco-Nevada Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, June 25th. Shareholders of record on Thursday, June 11th will be issued a $0.44 dividend. This represents a $1.76 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date of this dividend is Thursday, June 11th. Franco-Nevada’s payout ratio is currently 30.56%.

Analyst Ratings Changes

FNV has been the subject of several recent research reports. Weiss Ratings upgraded shares of Franco-Nevada from a “hold (c+)” rating to a “buy (b)” rating in a research note on Friday, March 20th. Wall Street Zen upgraded shares of Franco-Nevada from a “hold” rating to a “buy” rating in a research note on Sunday, April 26th. HC Wainwright reiterated a “buy” rating and set a $305.00 target price on shares of Franco-Nevada in a research note on Wednesday. Canadian Imperial Bank of Commerce reiterated an “outperform” rating on shares of Franco-Nevada in a research note on Wednesday, February 4th. Finally, UBS Group reiterated a “buy” rating and set a $310.00 target price on shares of Franco-Nevada in a research note on Friday, January 30th. Eight research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $257.25.

Institutional Investors Weigh In On Franco-Nevada

A number of institutional investors have recently added to or reduced their stakes in FNV. AQR Capital Management LLC purchased a new stake in Franco-Nevada in the 1st quarter valued at approximately $241,000. NewEdge Advisors LLC boosted its holdings in Franco-Nevada by 16.7% in the 1st quarter. NewEdge Advisors LLC now owns 6,585 shares of the basic materials company’s stock valued at $1,038,000 after purchasing an additional 943 shares in the last quarter. Intech Investment Management LLC boosted its holdings in Franco-Nevada by 118.3% in the 1st quarter. Intech Investment Management LLC now owns 9,286 shares of the basic materials company’s stock valued at $1,460,000 after purchasing an additional 5,032 shares in the last quarter. Acadian Asset Management LLC lifted its position in shares of Franco-Nevada by 800.0% during the 1st quarter. Acadian Asset Management LLC now owns 2,700 shares of the basic materials company’s stock valued at $424,000 after acquiring an additional 2,400 shares during the period. Finally, Marshall Wace LLP acquired a new stake in shares of Franco-Nevada during the 2nd quarter valued at approximately $1,477,000. Hedge funds and other institutional investors own 77.06% of the company’s stock.

Franco-Nevada Company Profile

Franco-Nevada Corporation is a Toronto-based royalty and streaming company that specializes in securing and managing long-term interests in mining properties. The firm focuses primarily on precious metals, particularly gold, while also holding interests related to silver, copper, platinum-group metals and select base metals. Rather than operating mines directly, Franco-Nevada acquires royalty and streaming agreements that entitle it to a percentage of production or revenue from producing and developing assets in exchange for upfront or staged financing.

The company’s business model centers on providing capital to mining companies in return for a sustained share of production or metal revenue, which can reduce exposure to operating and capital cost risks typical of mine operators.