Franco-Nevada (FNV) vs. Its Peers Head-To-Head Review

Franco-Nevada (NYSE: FNV) is one of 41 publicly-traded companies in the “Gold & silver ores” industry, but how does it contrast to its peers? We will compare Franco-Nevada to similar companies based on the strength of its dividends, earnings, risk, valuation, profitability, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

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63.1% of Franco-Nevada shares are held by institutional investors. Comparatively, 31.5% of shares of all “Gold & silver ores” companies are held by institutional investors. 10.5% of shares of all “Gold & silver ores” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Franco-Nevada has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500. Comparatively, Franco-Nevada’s peers have a beta of 0.34, indicating that their average stock price is 66% less volatile than the S&P 500.

Dividends

Franco-Nevada pays an annual dividend of $0.92 per share and has a dividend yield of 1.3%. Franco-Nevada pays out 85.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Gold & silver ores” companies pay a dividend yield of 1.4% and pay out 48.2% of their earnings in the form of a dividend. Franco-Nevada has increased its dividend for 5 consecutive years. Franco-Nevada lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Franco-Nevada and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franco-Nevada 1 5 4 0 2.30
Franco-Nevada Competitors 422 1738 1624 67 2.35

Franco-Nevada currently has a consensus price target of $88.38, indicating a potential upside of 23.64%. As a group, “Gold & silver ores” companies have a potential upside of 21.48%. Given Franco-Nevada’s higher probable upside, analysts plainly believe Franco-Nevada is more favorable than its peers.

Valuation & Earnings

This table compares Franco-Nevada and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Franco-Nevada $675.00 million $194.70 million 66.19
Franco-Nevada Competitors $1.40 billion $84.66 million 42.60

Franco-Nevada’s peers have higher revenue, but lower earnings than Franco-Nevada. Franco-Nevada is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Franco-Nevada and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franco-Nevada 28.84% 4.38% 4.30%
Franco-Nevada Competitors -8.64% 3.68% 2.67%

Summary

Franco-Nevada peers beat Franco-Nevada on 8 of the 15 factors compared.

Franco-Nevada Company Profile

Franco-Nevada Corporation operates as a gold-focused royalty and stream company in the United States, Canada, Mexico, Peru, Chile, Australia, and Africa. The company also holds interests in silver, platinum group metals, oil and gas, and other resource assets. As of December 31, 2017, it had a portfolio of 341 assets. The company was incorporated in 2007 and is headquartered in Toronto, Canada.

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