Franco-Nevada Corp. (FNV, Financial) will release its financial and operating results for the second quarter of fiscal 2017 after the market closes on Aug. 8.
For the second quarter, analysts forecast the gold royalty and stream company will post EPS of 24 cents on average, ranging between a low of 23 cents and a high of 26 cents.
Source: Yahoo Finance
Revenue is expected to come in at $159.35 million, a 5.60% increase year over year. Estimates range between a low of $155 million and a high of $165.05 million.
Source: Yahoo Finance
With the earnings announcement, Franco-Nevada will also update its financial situation.
As of the first quarter of fiscal 2017, the company had approximately $283 million in cash on hand and securities, or $1.57 per share, and no debt. The current ratio was 12.17 and the book value was 23.37.
The company's business relies on producing assets, which are located on three different continents – 28 royalty income sources in the Americas, nine in Africa and nine in Australia. These assets produce a yearly operating cash flow of approximately $460 million to $480 million.
Since it has no debt, Franco-Nevada can allocate between $180 million to $200 million to dividends and to further grow the business. The company distributes an annual dividend of 92 cents through quarterly payments of 23 cents to its shareholders, for a dividend yield of 1.26%. The company has increased its annual dividend every year since 2007.
With so much cash available and no financial obligations, the company has ample financial flexibility to expand its portfolio. Since its mineral resources are running out, the company is diversifying its asset base to include oil and gas interests. This accounts for approximately 10% of the company’s current portfolio of income-producing assets.
Franco-Nevada is currently trading around $73.27 with a market capitalization of $11.96 billion, a price-book (P/B) ratio of 3.13, a price-sales (P/S) ratio of 18.40 and an EV/Ebitda ratio of 26.06.
GuruFocus gives the company a financial strength rating of 9 out of 10 and a profitability and growth rating of 8 out of 10.
The recommendation rating is 2.7 out of 5, and the average target price is $74.34.
Disclosure: I have no positions in Franco-Nevada Corp.
