Sprott (NYSE:SII) Releases Earnings Results

Key Points

• Sprott reported quarterly EPS of $0.86, missing the analyst consensus of $1.03 by $0.17.
• Despite the earnings miss, adjusted EBITDA rose 44% year over year to $46 million, net income climbed 67% to $22 million, and average AUM increased 39% to $58.8 billion. Quarter-end AUM was $57.3 billion, with $200 million in net redemptions, mainly from physical trusts.
• The company raised its quarterly dividend 25%, from $0.40 to $0.50 per share, marking its third consecutive year of double-digit dividend growth.

Sprott (NYSE:SII - Get Free Report) issued its earnings results on Wednesday. The company reported $0.86 EPS for the quarter, missing analysts' consensus estimates of $1.03 by ($0.17), Zacks reports. Sprott had a net margin of 26.36% and a return on equity of 28.40%.

Here are the key takeaways from Sprott's conference call:

• Profitability rose sharply: Third-quarter adjusted EBITDA increased 44% year over year to $46 million, while net income rose 67% to $22 million. Average AUM was up 39% year over year to $58.8 billion.
• Flows remained uneven: AUM ended the quarter at $57.3 billion, up 3% from June but down 4% year over year, with $200 million in net redemptions, primarily from physical trusts. The Physical Silver Trust saw $421 million in outflows, partly attributed by management to silver-market weakness and India’s import restrictions.
• Critical materials strategies attracted investors: The company reported about $200 million in net sales for these strategies, while investors added to uranium and rare-earth products. Management highlighted long-term supply constraints and said its uranium assets under management have grown to more than $10 billion.
• Shareholder returns and financial flexibility strengthened: The board raised the regular quarterly dividend by 25%, its third consecutive year of double-digit growth. Sprott ended September with more than $200 million in cash, no debt, and year-to-date share repurchases approaching 1% of shares outstanding.
• Management expects volatile markets but remains constructive on metals: Executives attributed precious-metals pressure to liquidity and interest-rate-related selling, while arguing that fiscal and geopolitical risks support the longer-term outlook. They cautioned that commodity prices and investor participation are difficult to predict.

Sprott Price Performance

SII stock traded up $7.80 during midday trading on Wednesday, reaching $112.95. The company had a trading volume of 302,855 shares, compared to its average volume of 107,142. The stock has a 50 day moving average price of $119.08 and a 200-day moving average price of $126.52. The company has a market capitalization of $2.90 billion, a price-to-earnings ratio of 27.69 and a beta of 0.96. Sprott has a 1-year low of $78.79 and a 1-year high of $169.63.

Sprott Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 1st. Shareholders of record on Monday, November 16th will be issued a $0.50 dividend. The ex-dividend date of this dividend is Monday, November 16th. This represents a $2.00 annualized dividend and a yield of 1.8%. This is a boost from Sprott's previous quarterly dividend of $0.40. Sprott's payout ratio is presently 39.22%.

Analyst Ratings Changes

A number of brokerages have weighed in on SII. TD Securities reissued a "hold" rating on shares of Sprott in a report on Thursday, August 6th. Weiss Ratings raised Sprott from a "buy (b-)" rating to a "buy (b)" rating in a report on Thursday, October 8th. Finally, Wall Street Zen cut shares of Sprott from a "buy" rating to a "hold" rating in a research report on Saturday, August 8th. Two investment analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $230.00.

Sprott Company Profile

Sprott Inc is an alternative asset manager focused on precious metals and other real assets. The company provides investment solutions designed to give investors exposure to gold, silver, uranium, energy transition materials, and natural resources.

Its offerings include exchange-traded funds, closed-end funds, physical bullion trusts, managed accounts, and private-market strategies. Sprott's products may invest directly in physical commodities, resource companies, or assets connected to the natural resources and real asset sectors.

Founded in 1981, Sprott serves institutional and individual investors across North America and international markets.

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