Sprott (SII) has received a new Buy rating, initiated by BMO Capital analyst, Etienne Ricard.
Etienne Ricard has given his Buy rating due to a combination of factors that highlight Sprott’s strengths as an alternative asset manager. The company has demonstrated a consistent track record of mid-single-digit net flows throughout various precious metals cycles, which is a testament to its robust business model. Additionally, Sprott benefits from a scalable structure that generates significant free cash flow, supporting valuations that exceed 20 times earnings.
Moreover, Sprott offers promising long-term annual return on investment prospects in the low-to-mid-teens range. This is bolstered by factors such as positive operating leverage, a dividend yield of approximately 3%, and a strong market position in both traditional precious metals trusts and newer fund offerings like uranium-focused funds. The company’s debt-free balance sheet and substantial free cash flow further enhance its ability to deploy capital effectively, whether through rising dividends, strategic acquisitions, or share buybacks, making it an attractive investment opportunity.
According to TipRanks, Ricard is a 5-star analyst with an average return of 23.2% and a 69.79% success rate. Ricard covers the Financial sector, focusing on stocks such as Victory Capital Holdings, Apollo Global Management, and Franklin Resources.
In another report released on February 28, TD Securities also maintained a Buy rating on the stock with a C$71.00 price target.
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