Franco-Nevada Corporation (FNV, Financial) declared a 22-cent per share quarterly dividend on Feb. 9.
The quarterly dividend is in line with the previous quarterly payments and will be paid on March 30 to shareholders of record on March 16.
Franco-Nevada Corp. is trading at $67.88 per share, leading to a dividend yield of 1.3%.
Yesterday’s closing price was down 18 cents from the previous trading day and a volume of 609,033 shares were traded on the New York Stock Exchange.
Franco-Nevada Corp. continues to deliver part of its income to the shareholders, so we can expect an ongoing improvement in the company’s financials.
The company will release its fourth quarter and full year 2016 financial results on March 22. Waiting for the results, 11 analysts have already released their forecasts on Franco Nevada Corporation’s Q4 2016 results. The Q4 2016 EPS is estimated to be 21 cents on average.
Source: Yahoo Finance
The average estimate for EPS ranges between a low estimate of 19 cents and a high estimate of 30 cents.
Concerning revenue for the last quarter of 2016, analysts forecast a figure of $154.4 million, a 27.30% increase from one year ago. It ranges between a low estimate of $146.6 million and a high estimate of $162.29 million.
Source: Yahoo Finance
The 27.30% growth on a year over year basis is realistic since the price per ounce of gold and silver, which accounts for approximately 65% and 20% of the company’s total revenue, increased by 10.3% and 16.4% from Q4 2015.
The analysts’ forecast for Q4 2016 revenue represents a 4.5% decrease from the previous quarter when Franco-Nevada reported revenue of $161.7 million.
The decline in revenue on a quarter over quarter basis follows the drop in the precious metal prices from Q3 2016 to Q4 2016. Approximately 95% of Franco-Nevada's total revenue comes from precious metal and only 5% from oil and gas.
Franco-Nevada Corp., a leader in the industry thanks to its large portfolio of assets situated in the Americas, Africa, Southeast Europe and Australia, allows shareholders to protect their investment value during market downturns, which is typical for any investment in the gold industry, and at the same time it reduces the risk associated with mining.
During the fiscal year 2016, shareholders of Franco-Nevada benefited from rising precious metal prices that drove the stock to gain more than 30%. The distribution of quarterly dividends, thanks to the company's high-quality asset base, makes Franco-Nevada a positive free cash flow generator.
Concerning Franco-Nevada’s high volatility to changes in the commodity prices, it is not by chance that Franco-Nevada could achieve a new company record with an adjusted Ebitda of $142.2 million, or 80 cents per share.
Part of its cash flow is also invested in the company’s projects pipeline that has the potential to further expand the business of Franco-Nevada and grow organically.
Franco-Nevada has $277.6 million in cash on hand and securities that can be readily converted into cash, plus a line of disposable unsecured credit of $1 billion that can be used by the company until 2020. The company is also debt free.
Franco-Nevada has a market capitalization of $12.01 billion and 178.25 million shares outstanding.
Analysts recommend to hold this stock. The recommendation rating is 2.9 and the average price target is $70.13 per share versus a market price of $67.78. The price ranges between a low of $60 per share and a high of $80 per share.
The stock is trading at 2.88 times its book value and 25.98 times its Ebitda.
Disclosure: I have no positions in Franco-Nevada Corporation.
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