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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash to Debt 2.20
RGLD's Cash to Debt is ranked higher than
74% of the 2420 Companies
in the Global Gold industry.

( Industry Median: 2.51 vs. RGLD: 2.20 )
RGLD' s 10-Year Cash to Debt Range
Min: 0.21   Max: No Debt
Current: 2.2

Equity to Asset 0.82
RGLD's Equity to Asset is ranked higher than
91% of the 1376 Companies
in the Global Gold industry.

( Industry Median: 0.62 vs. RGLD: 0.82 )
RGLD' s 10-Year Equity to Asset Range
Min: 0.66   Max: 0.98
Current: 0.82

0.66
0.98
F-Score: 5
Z-Score: 5.27
M-Score: -2.74
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 7/10

vs
industry
vs
history
Operating margin (%) 45.06
RGLD's Operating margin (%) is ranked higher than
97% of the 1468 Companies
in the Global Gold industry.

( Industry Median: 1.76 vs. RGLD: 45.06 )
RGLD' s 10-Year Operating margin (%) Range
Min: -940   Max: 59.64
Current: 45.06

-940
59.64
Net-margin (%) 26.48
RGLD's Net-margin (%) is ranked higher than
97% of the 1468 Companies
in the Global Gold industry.

( Industry Median: -2.32 vs. RGLD: 26.48 )
RGLD' s 10-Year Net-margin (%) Range
Min: -880   Max: 86.82
Current: 26.48

-880
86.82
ROE (%) 2.81
RGLD's ROE (%) is ranked higher than
89% of the 2383 Companies
in the Global Gold industry.

( Industry Median: -7.48 vs. RGLD: 2.81 )
RGLD' s 10-Year ROE (%) Range
Min: -56.96   Max: 50.08
Current: 2.81

-56.96
50.08
ROA (%) 2.29
RGLD's ROA (%) is ranked higher than
91% of the 2439 Companies
in the Global Gold industry.

( Industry Median: -5.78 vs. RGLD: 2.29 )
RGLD' s 10-Year ROA (%) Range
Min: -53.82   Max: 45.67
Current: 2.29

-53.82
45.67
ROC (Joel Greenblatt) (%) 5.19
RGLD's ROC (Joel Greenblatt) (%) is ranked higher than
90% of the 2404 Companies
in the Global Gold industry.

( Industry Median: -6.73 vs. RGLD: 5.19 )
RGLD' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -159.32   Max: 66.03
Current: 5.19

-159.32
66.03
Revenue Growth (3Y)(%) -2.30
RGLD's Revenue Growth (3Y)(%) is ranked higher than
75% of the 1091 Companies
in the Global Gold industry.

( Industry Median: 1.60 vs. RGLD: -2.30 )
RGLD' s 10-Year Revenue Growth (3Y)(%) Range
Min: -37.9   Max: 124.6
Current: -2.3

-37.9
124.6
EBITDA Growth (3Y)(%) -3.80
RGLD's EBITDA Growth (3Y)(%) is ranked higher than
83% of the 1556 Companies
in the Global Gold industry.

( Industry Median: -13.70 vs. RGLD: -3.80 )
RGLD' s 10-Year EBITDA Growth (3Y)(%) Range
Min: -4.1   Max: 75.7
Current: -3.8

-4.1
75.7
EPS Growth (3Y)(%) -9.40
RGLD's EPS Growth (3Y)(%) is ranked higher than
79% of the 1403 Companies
in the Global Gold industry.

( Industry Median: -14.20 vs. RGLD: -9.40 )
RGLD' s 10-Year EPS Growth (3Y)(%) Range
Min: -14.7   Max: 91.3
Current: -9.4

-14.7
91.3
» RGLD's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q4 2013

RGLD Guru Trades in Q4 2013

Paul Tudor Jones 8,257 sh (New)
Ray Dalio 55,100 sh (+69.02%)
Chuck Royce 3,000 sh (+57.89%)
Mario Gabelli 18,910 sh (unchged)
Jean-Marie Eveillard 867,401 sh (unchged)
Steven Cohen Sold Out
Jim Simons 357,983 sh (-44.57%)
» More
Q1 2014

RGLD Guru Trades in Q1 2014

Chuck Royce 3,850 sh (+28.33%)
Jean-Marie Eveillard 867,401 sh (unchged)
Paul Tudor Jones Sold Out
Mario Gabelli 18,880 sh (-0.16%)
Ray Dalio 52,800 sh (-4.17%)
Jim Simons 5,700 sh (-98.41%)
» More
Q2 2014

RGLD Guru Trades in Q2 2014

Jim Simons 193,709 sh (+3298.4%)
Mario Gabelli 23,700 sh (+25.53%)
Ray Dalio 56,800 sh (+7.58%)
Jean-Marie Eveillard 867,401 sh (unchged)
Chuck Royce 2,250 sh (-41.56%)
» More
Q3 2014

RGLD Guru Trades in Q3 2014

Murray Stahl 99,338 sh (New)
Jim Simons 483,709 sh (+149.71%)
Chuck Royce 2,600 sh (+15.56%)
Jean-Marie Eveillard 912,534 sh (+5.2%)
Ray Dalio 59,200 sh (+4.23%)
Mario Gabelli 23,500 sh (-0.84%)
» More
» Details

Insider Trades

Latest Guru Trades with RGLD

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Mario Gabelli 2014-06-30 Add 25.53%$60.14 - $75.28 $ 63.82-3%23700
Ray Dalio 2013-12-31 Add 69.02%0.01%$43.4 - $52.85 $ 63.8235%55100
John Burbank 2013-06-30 Sold Out 0.3%$39.1 - $70.97 $ 63.8218%0
Ray Dalio 2013-06-30 Add 347.5%0.01%$39.1 - $70.97 $ 63.8218%35800
John Burbank 2013-03-31 New Buy0.3%$62.9 - $82.84 $ 63.82-12%105142
Ray Dalio 2013-03-31 New Buy0.01%$62.9 - $82.84 $ 63.82-12%8000
NWQ Managers 2012-03-31 Sold Out 0.15%$63 - $77.34 $ 63.82-1%0
Jean-Marie Eveillard 2012-03-31 Reduce -21.11%0.07%$63 - $77.34 $ 63.82-1%934401
Mario Gabelli 2012-03-31 Add 247.57%0.01%$63 - $77.34 $ 63.82-1%18560
Mario Gabelli 2011-12-31 Add 57.06%$61.22 - $81.45 $ 63.82-12%5340
Mario Gabelli 2011-09-30 New Buy$58.88 - $82.69 $ 63.82-9%3400
Premium More recent guru trades are included for Premium Members only!!
Premium More recent guru trades are included for USA Subscribe Members only!!
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Guru Investment Theses on Royal Gold Inc

Murray Stahl’s Horizon Kinetics Comments on Royal Gold Inc - Dec 22, 2014

An idiosyncratic security with benefits – a diversifier

Let’s find a contrasting investment to a utility index or a REIT index, which are front and center as bond substitutes or asset allocation building blocks. They are therefore closely governed in valuation and price behavior by the asset flows of index investors and, so, might be particularly vulnerable to a rise in interest rates. Consider, instead, a very distinctive security like Royal Gold, Inc (RGLD). It is categorized in financial securities databases like a gold mining company. Yet it does not do any mining, and on a balance sheet and income statement basis has as little in common with gold mining as Microsoft (MSFT): it has virtually no property, plant, or equipment, it carries no net debt, it has extremely high after-tax cash flow margins—well over 50%. Microsoft’s are roughly 25%. Its financial statements and casually observable economics say that it really does not belong with the gold mining group.

Royal Gold is one of several publicly traded precious metals royalty companies. They solve a unique problem of miners, which must find a way to fund the massive capital costs of developing a new mine yet cannot afford the risk of taking on too much debt, since such a project might not be productive for many years, during which time input and output costs can drastically alter the anticipated profitability. The standard alternative, issuing more shares, is often too dilutive. The royalty companies extend cash to a miner in exchange for a percentage of the production. The royalty company is not directly exposed to the operating costs or liabilities of the miner and earns its revenues even if the miner produces at only a breakeven level of profitability.

However, the royalty business is far better than merely that. When Royal Gold purchases a revenue interest, it might be for the life of the mine, which could exceed 20 years. But the purchase price is calculated as the present value of the future estimated revenues, based on the current gold price. As an example, if the interest rate used to calculate that present value is 10%, and if the mine will start production next year, then the price paid for the first year’s production will be 10% less than the gold price. So, if today’s gold price is $1,300 per ounce, Royal Gold will pay only $1,170 for next year’s gold production. But the 2nd year’s production will cost 10% less than that, or $1,050. The 20th year’s gold price for Royal Gold would be only 15% of today’s price, or $193. In total, Royal Gold would advance $11,068 for what will be $26,000 of gold production ($1,300/year x 20 years).

There are other aspects to such a contract that provide additional financial benefits. But staying with this information for the moment, one can say that Royal Gold has the safety of paying drastically less than the current price of gold for its future production. There is a great deal of protection from downward volatility in gold prices in that contract. Additionally, the royalty percentage is often of the sliding variety: it might start at 1% of mine output, but with scheduled increases as the gold price rises above certain levels, up to 5% or more. Accordingly, there is positive operating leverage for Royal Gold in the event that gold prices rise.

Viewed this way, Royal Gold is better described as a merchant bank than a gold mining company. In a sense, it has as much in common with the activity of gold mining as JP Morgan Chase (JPM) has with an automobile manufacturer merely because the bank might have lent money to the car company. In actuality, the comparison with JP Morgan Chase is a poor one, since banks operate with extreme debt leverage, and Royal Gold operates with none. A further differentiation of Royal Gold’s business model from that of wither Microsoft or JP Morgan Chase: While Royal Gold has a $4 billion stock market capitalization, how many employees do you think it has? The answer is 20. For what it’s worth, the company states that none of them are subject to a labor contract or a collective bargaining agreement.



In a portfolio context, Royal Gold has long-term growth characteristics, because it does add new contracts to its portfolio of interests, and its earnings are positively associated with whatever economic conditions might lead to higher gold prices, one of which is inflation or the anticipation of inflation or geopolitical risk. Yet, because of its contract structure, it is remarkably well-insulated from price declines in that commodity. Accordingly, its profitability is not closely tied to the factors that impact the typical industrial or financial company and it should be a diversifying element in a portfolio. Its remarkably low correlation with the S&P 500 over the past half-dozen years, at 0.1334, is the statistical evidence. The visual evidence, from the pre-crisis date of mid-2008, is shown in the accompanying chart of Royal Gold relative to both a gold mining company index (Market Vectors Gold Miners ETF, GDX) and the SPDR Gold Shares ETF (GLD), which holds gold bullion.

Both Royal Gold and Silver Wheaton, which acquires primarily silver royalty interests and manifests somewhat different price patterns, are new holdings in the Core Value strategy. These follow, as mentioned in last quarter’s Commentary, additional investments in land companies such as Tri Pointe Homes and Brookfield Residential Properties. They also exhibit the characteristic of trading at prices well below the long-term realizations they should draw from their asset portfolios. They are, in practice, idiosyncratic securities that, much more than the large-cap companies that comprise the asset allocation index and ETF building blocks, will exhibit stock prices tied to their own financial development rather than to the public flow of funds. A portfolio comprised of such companies will be a more effectively diversified investment.

From Murray Stahl (Trades, Portfolio)’s Horizon Kinetics 3Q 2014 Commentary.

Check out Murray Stahl latest stock trades

Top Ranked Articles about Royal Gold Inc

Murray Stahl’s Horizon Kinetics Comments on Royal Gold Inc
An idiosyncratic security with benefits – a diversifier Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 62.80
RGLD's P/E(ttm) is ranked higher than
91% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 62.80 )
RGLD' s 10-Year P/E(ttm) Range
Min: 29.16   Max: 116.04
Current: 62.8

29.16
116.04
P/B 1.76
RGLD's P/B is ranked higher than
74% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 1.27 vs. RGLD: 1.76 )
RGLD' s 10-Year P/B Range
Min: 1.15   Max: 5.88
Current: 1.76

1.15
5.88
P/S 16.62
RGLD's P/S is ranked higher than
81% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 16.62 )
RGLD' s 10-Year P/S Range
Min: 9.14   Max: 30.83
Current: 16.62

9.14
30.83
PFCF 33.07
RGLD's PFCF is ranked higher than
93% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 33.07 )
RGLD' s 10-Year PFCF Range
Min: 19.22   Max: 143.15
Current: 33.07

19.22
143.15
EV-to-EBIT 33.57
RGLD's EV-to-EBIT is ranked higher than
90% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 33.57 )
RGLD' s 10-Year EV-to-EBIT Range
Min: 13.8   Max: 71.1
Current: 33.57

13.8
71.1
PEG 8.58
RGLD's PEG is ranked higher than
97% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 8.58 )
RGLD' s 10-Year PEG Range
Min: 0.72   Max: 9.22
Current: 8.58

0.72
9.22
Shiller P/E 55.28
RGLD's Shiller P/E is ranked higher than
92% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 55.28 )
RGLD' s 10-Year Shiller P/E Range
Min: 38.69   Max: 119.33
Current: 55.28

38.69
119.33
Current Ratio 36.44
RGLD's Current Ratio is ranked higher than
97% of the 2425 Companies
in the Global Gold industry.

( Industry Median: 2.39 vs. RGLD: 36.44 )
RGLD' s 10-Year Current Ratio Range
Min: 2.17   Max: 62.19
Current: 36.44

2.17
62.19
Quick Ratio 36.44
RGLD's Quick Ratio is ranked higher than
97% of the 2424 Companies
in the Global Gold industry.

( Industry Median: 1.67 vs. RGLD: 36.44 )
RGLD' s 10-Year Quick Ratio Range
Min: 2.17   Max: 62.19
Current: 36.44

2.17
62.19

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 1.32
RGLD's Dividend Yield is ranked lower than
66% of the 681 Companies
in the Global Gold industry.

( Industry Median: 2.08 vs. RGLD: 1.32 )
RGLD' s 10-Year Dividend Yield Range
Min: 0.52   Max: 1.84
Current: 1.32

0.52
1.84
Dividend Payout 0.83
RGLD's Dividend Payout is ranked higher than
93% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 0.83 )
RGLD' s 10-Year Dividend Payout Range
Min: 0.13   Max: 2.94
Current: 0.83

0.13
2.94
Dividend growth (3y) 25.50
RGLD's Dividend growth (3y) is ranked higher than
92% of the 487 Companies
in the Global Gold industry.

( Industry Median: 9.40 vs. RGLD: 25.50 )
RGLD' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 35.8
Current: 25.5

0
35.8
Yield on cost (5-Year) 4.13
RGLD's Yield on cost (5-Year) is ranked higher than
63% of the 697 Companies
in the Global Gold industry.

( Industry Median: 2.90 vs. RGLD: 4.13 )
RGLD' s 10-Year Yield on cost (5-Year) Range
Min: 1.65   Max: 5.84
Current: 4.13

1.65
5.84
Share Buyback Rate -5.50
RGLD's Share Buyback Rate is ranked higher than
85% of the 1909 Companies
in the Global Gold industry.

( Industry Median: -9.40 vs. RGLD: -5.50 )
RGLD' s 10-Year Share Buyback Rate Range
Min: -1.9   Max: -20.8
Current: -5.5

Valuation & Return

vs
industry
vs
history
Price/Net Cash 26.05
RGLD's Price/Net Cash is ranked higher than
88% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 26.05 )
RGLD' s 10-Year Price/Net Cash Range
Min: 5.86   Max: 191.07
Current: 26.05

5.86
191.07
Price/Net Current Asset Value 20.32
RGLD's Price/Net Current Asset Value is ranked higher than
87% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 20.32 )
RGLD' s 10-Year Price/Net Current Asset Value Range
Min: 5.6   Max: 4676
Current: 20.32

5.6
4676
Price/Tangible Book 1.76
RGLD's Price/Tangible Book is ranked higher than
77% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 1.51 vs. RGLD: 1.76 )
RGLD' s 10-Year Price/Tangible Book Range
Min: 1.16   Max: 14.94
Current: 1.76

1.16
14.94
Price/Median PS Value 1.00
RGLD's Price/Median PS Value is ranked higher than
86% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 1.00 )
RGLD' s 10-Year Price/Median PS Value Range
Min: 0.32   Max: 23.53
Current: 1

0.32
23.53
Price/Peter Lynch Fair Value 7.89
RGLD's Price/Peter Lynch Fair Value is ranked higher than
98% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 7.89 )
RGLD' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.93   Max: 8.69
Current: 7.89

0.93
8.69
Price/Graham Number 2.19
RGLD's Price/Graham Number is ranked higher than
92% of the 2646 Companies
in the Global Gold industry.

( Industry Median: 9999.00 vs. RGLD: 2.19 )
RGLD' s 10-Year Price/Graham Number Range
Min: 1.32   Max: 16.46
Current: 2.19

1.32
16.46
Earnings Yield (Greenblatt) 3.00
RGLD's Earnings Yield (Greenblatt) is ranked higher than
89% of the 2387 Companies
in the Global Gold industry.

( Industry Median: -5.10 vs. RGLD: 3.00 )
RGLD' s 10-Year Earnings Yield (Greenblatt) Range
Min: 1.4   Max: 7.2
Current: 3

1.4
7.2
Forward Rate of Return (Yacktman) 4.30
RGLD's Forward Rate of Return (Yacktman) is ranked higher than
85% of the 678 Companies
in the Global Gold industry.

( Industry Median: 2.01 vs. RGLD: 4.30 )
RGLD' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 1.3   Max: 53.5
Current: 4.3

1.3
53.5

Analyst Estimate

Jun15 Jun16 Jun17
Revenue(Mil) 341 398 391
EPS($) 1.55 2.05 1.70
EPS without NRI($) 1.55 2.05 1.70

Business Description

Industry: Metals & Mining » Gold
Compare:EGO, ABX, GG, NMCEF, IAG » details
Traded in other countries:RGL.Canada, RG3.Germany,
Royal Gold Inc was incorporated under the laws of the State of Delaware on January 5, 1981. The Company together with its subsidiaries is engaged in the business of acquiring and managing precious metals royalties and similar interests. It is engaged in a continual review of opportunities to acquire existing royalties, to create new royalties through the financing of mine development or exploration, or to acquire companies that hold royalties. The Company uses evaluation stage to describe exploration stage properties that contain mineralized material and on which operators are engaged in the search for reserves. It competes with other royalty and streaming companies, mine operators, and financial buyers in efforts to acquire existing royalty interests, and with the lenders and investors providing financing to operators of mineral properties. The Company's business is subject to the environmental laws and regulations promulgated by federal, state and local governments.
» More Articles for RGLD

Headlines

Articles On GuruFocus.com
Murray Stahl’s Horizon Kinetics Comments on Royal Gold Inc Dec 22 2014 
Murray Stahl’s Horizon Kinetics 3Q 2014 Commentary Dec 22 2014 
Precious Metal Royalty & Streaming Companies: A Qualitative Analysis Mar 31 2014 
Mining for Gold, Minus the Risks: Why Royal Gold Has a Lot to Offer Dec 19 2013 
Back to Basic Materials – Second Quarter Updates and Guru Trades Aug 10 2013 
9 Dividend Stocks Trading at a Double-Digit Discount Mar 20 2013 
comment on RGLD Mar 09 2013 
Financials look grea Mar 05 2013 
Streamers rule -- ba Mar 05 2013 
Stocks Traded at Historical Low Price/Book Ratios: RGLD, AZN, ABT, JNJ, WMT May 16 2011 

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