Precious Metals

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Franco-Nevada Corporation - >>> A Canada-based streaming and royalty company. It has a diversified portfolio, with agreements tied to gold, silver, the platinum group metals (PGMs), iron ore, and oil and gas. In the third quarter of 2022, 55% of its revenue came from gold.


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A major benefit of Franco-Nevada's focus on royalties and streaming is that it reduces risk. It doesn’t face the capital and operating cost overruns that have historically plagued mining companies. At the same time, Franco-Nevada’s agreements position it to profit as its mining partners complete exploration and expansion projects.

Franco-Nevada's streaming and royalty contracts provide it with the ability to generate lots of cash by selling the physical commodities it receives. That cash flow enables it to invest in new deals and pay a dividend.

Franco-Nevada has increased its dividend each year since its initial public offering (IPO) in 2008, hitting a milestone 15 consecutive years in 2022. The company also boasts a debt-free balance sheet -- a rarity in the mining industry -- giving it even more financial flexibility to invest in new royalty and streaming agreements.

Because Franco-Nevada can profit from gold mining without exposure to the risks of mine development, its stock has historically outperformed the price of gold and other gold mining stocks. All of these factors make it an ideal gold stock investment.

Also, for those interested in ESG factors, the company said in its 2022 asset handbook that it has a goal of achieving 40% diverse representation between the board and senior management as a group by 2025. As The Motley Fool Co-Founder David Gardner says, "Invest for the world you want to see."

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