March 18th, 2009:
Royal Gold Inc (RGLD)
Current Price: $42.21
www.royalgold.com
Royal Gold Inc (RGLD) acquires and operates precious metals royalties. The company owns royalty interests in various producing, development, evaluation, and exploration stage projects, which explore for gold, silver, copper, lead, and zinc metals. It holds royalty interests in properties located in the United States, Canada, Mexico, Africa, Argentina, Chile, Australia, the Russian Federation, Finland, Columbia, and Central America. The company was founded in 1981 and is based in Denver, Colorado.
RGLD is the leading precious metals royalty company. RGLD owns and manages royalties on principally precious metals mines, most of which contain gold and silver deposits. A royalty is simply a right to receive a percentage of production from a mine.
RGLD's royalty portfolio provides investors with a unique opportunity to capture value in the precious metals sector without incurring many of the risks associated with mine operations such as capital costs, operating costs, and environmental liabilities. The distinction between a royalty company and a mining company is very important in the current market environment where the costs to build and operate mines are rising significantly.
RGLD owns a large portfolio of active, developing and exploration style royalties located in some of the world’s most prolific gold regions. While the company does not have to contribute to exploration costs, exploration successes by the operators of the royalty properties benefit RGLD greatly.
With a successful business model and business strategy that generates strong cash flow and high margins due to its low cost structure, RGLD provides shareholders with a premium precious metals investment in a lower risk vehicle.
Last year, RGLD acquired three royalties from AngloGold Ashanti (AU) and Barrick Gold (ABX)!
RGLD has amazing fundamentals that continue to grow significantly year over year. RGLD has over $69 million in revenue, over $62 million in gross profit, $55 million in cash, and minimal debt. RGLD has grown its revenues consistently from $28.38 million in 2006 to $48.38 million in 2007 and $66.3 million in 2008! 2009 is already looking very bright for the company with an EPS growth estimate of 48%!
In the most recent quarter RGLD's net income quadrupled! Revenue, free cash flow and earnings have grown at an average annual compounded rate of 34%, 38% and 31%, respectively, over a five-year period. Institutional investors own 62% of RGLD's shares.
RGLD pays a dividend of $0.08 per quarter. Their next dividend is payable on April 17, 2009 to shareholders of record at the close of business on April 3, 2009. RGLD has paid dividends since 2000.
RGLD is one of the few stocks that have gained this past year as worldwide stock markets have collapsed. We believe this momentum could continue and RGLD is a stock that you need to research and follow closely.
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