Canadian gold giant Franco-Nevada Corp. (FNV) is raising its quarterly dividend by 16% as the price of the yellow metal soars to a record high above $5,000 an ounce.
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Toronto-based Franco-Nevada says that it will pay a quarterly dividend of $0.44, up from $0.38 previously. It’s the 19th consecutive year that the company has raised its dividend. Franco-Nevada also announced that its current board chair David Harquail will become chair emeritus effective on May 12 of this year.
Harquail will be replaced as chair of the board of directors at Franco-Nevada by Tom Albanese, who is currently Franco-Nevada’s lead independent director. Before becoming board chair in 2020, Harquail was Franco-Nevada’s CEO for more than a decade.
Gold’s Big Rally
Franco-Nevada is not a gold miner. It’s a gold-focused royalty company. It owns a large portfolio of precious metals such as gold and silver without operating or developing mines. Instead, Franco-Nevada provides financing to mining companies in exchange for future production, offering investors exposure to gold while avoiding operational risks.
Management at Franco-Nevada says that the dividend increase has been made possible by the huge rally in gold’s price over the past year. The price of gold just rose above $5,000 an ounce and silver’s price topped $100 an ounce for the first time as investors seek out safe haven assets amid growing geopolitical uncertainty and market risks.
Franco-Nevada’s stock has risen 98% in the last 12 months.
Is FNV Stock a Buy?
Franco-Nevada’s stock has a consensus Moderate Buy rating among eight Wall Street analysts. That rating is based on four Buy and four Hold recommendations issued in the last three months. The average FNV price target of $245.53 implies 7.06% downside from current levels.
