Franco-Nevada Corporation (FNV) is a leading gold-focused royalty and streaming company with the largest and most diversified portfolio of royalties and streams by commodity, geography, revenue type and stage of project. The company’s goal is to become the go-to gold stock for the generalist investor by minimizing risk, paying dividends and maintaining a strong balance sheet with high ESG standards.
The company generated 85% of its revenue from mining activities during the first quarter of 2021 with the remainder coming from oil and natural gas. Within mining activities, the company generated revenue from gold (62%), silver (15%), and other assets. In terms of geographic diversification, the company’s revenue came primarily from the Americas (90%) with a focus on South America (29%), Central America (22%), the U.S. (22%) and Canada (18%).
Balancing a Strong Quarter with Monetary Policy
Franco-Nevada reported first quarter revenue that rose 28.4% to $308.9 million, beating consensus estimates by $1.22 million, with non-GAAP earnings of 84 cents per share, beating consensus estimates by eight cents. Operating cash flows came in at $224.3 million for the quarter, supporting its recent dividend increase.
Despite the strong financial results, investors are keeping a close eye on the Federal Reserve and its plans to control inflation. The central bank believes that the economy is far from the long-term inflation goal targets and said it would not taper or allow rates to rise too quickly.
The company raised its quarterly dividend by 15.4% to $0.30 per share, which represents a 0.81% forward yield. The dividend is payable on June 24, 2021, to shareholders on record as of June 10, 2021.
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