Franco-Nevada (NYSE:FNV) Sees Large Volume Increase Following Strong Earnings

Key Points

• Quarterly beat and big growth: Franco-Nevada reported $1.85 EPS (vs. $1.67 est.) and revenue of $597.3M (vs. $542.0M), with revenue up 86.1% year-over-year and a 59.48% net margin.
• Trading surge and market snapshot: Volume jumped 120% to about 1.99M shares after the results, the stock traded near $265, and the company has a market cap of $50.8B with a P/E of 55.46.
• Dividend raise and analyst consensus: Franco-Nevada increased its quarterly dividend to $0.44 ($1.76 annualized, ~0.7% yield), while analysts' consensus is a "Moderate Buy" with a $254.38 target price.

Franco-Nevada Corporation (NYSE:FNV - Get Free Report) TSE: FNV saw strong trading volume on Wednesday after the company announced better than expected quarterly earnings. 1,994,363 shares were traded during trading, an increase of 120% from the previous session's volume of 907,793 shares.The stock last traded at $265.4030 and had previously closed at $262.57.

The basic materials company reported $1.85 EPS for the quarter, beating the consensus estimate of $1.67 by $0.18. Franco-Nevada had a return on equity of 13.94% and a net margin of 59.48%.The firm had revenue of $597.30 million during the quarter, compared to the consensus estimate of $542.02 million. During the same period in the prior year, the business earned $0.95 EPS. The firm's revenue was up 86.1% compared to the same quarter last year.

Franco-Nevada Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, March 26th. Shareholders of record on Thursday, March 12th will be paid a $0.44 dividend. The ex-dividend date of this dividend is Thursday, March 12th. This represents a $1.76 annualized dividend and a yield of 0.7%. This is an increase from Franco-Nevada's previous quarterly dividend of $0.38. Franco-Nevada's dividend payout ratio is presently 31.87%.

Wall Street Analysts Forecast Growth

A number of research analysts have recently issued reports on FNV shares. Jefferies Financial Group reiterated a "hold" rating and set a $228.00 price target on shares of Franco-Nevada in a research note on Sunday, December 7th. Canaccord Genuity Group downgraded Franco-Nevada from a "strong-buy" rating to a "hold" rating in a research note on Friday, January 23rd. Wall Street Zen upgraded Franco-Nevada from a "hold" rating to a "buy" rating in a research note on Monday, November 24th. HC Wainwright increased their price objective on Franco-Nevada from $210.00 to $285.00 and gave the stock a "buy" rating in a research report on Friday, February 13th. Finally, Royal Bank Of Canada upgraded shares of Franco-Nevada from a "sector perform" rating to an "outperform" rating and boosted their target price for the stock from $225.00 to $250.00 in a research report on Wednesday, December 10th. One equities research analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and seven have issued a Hold rating to the company. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $254.38.

Hedge Funds Weigh In On Franco-Nevada

Hedge funds have recently bought and sold shares of the company. GAMMA Investing LLC boosted its position in Franco-Nevada by 112.3% during the fourth quarter. GAMMA Investing LLC now owns 121 shares of the basic materials company's stock worth $25,000 after purchasing an additional 64 shares in the last quarter. Transamerica Financial Advisors LLC purchased a new position in shares of Franco-Nevada in the fourth quarter valued at $25,000. Burkett Financial Services LLC acquired a new position in shares of Franco-Nevada during the 3rd quarter worth $28,000. Private Trust Co. NA acquired a new position in shares of Franco-Nevada during the 4th quarter worth $29,000. Finally, MTM Investment Management LLC purchased a new stake in shares of Franco-Nevada in the 2nd quarter worth about $32,000. 77.06% of the stock is owned by hedge funds and other institutional investors.

Franco-Nevada Stock Performance

The firm has a market capitalization of $50.83 billion, a PE ratio of 55.46, a price-to-earnings-growth ratio of 3.50 and a beta of 0.45. The firm's 50-day moving average is $247.60 and its 200 day moving average is $218.19.

Franco-Nevada Company Profile

Franco-Nevada Corporation is a Toronto-based royalty and streaming company that specializes in securing and managing long-term interests in mining properties. The firm focuses primarily on precious metals, particularly gold, while also holding interests related to silver, copper, platinum-group metals and select base metals. Rather than operating mines directly, Franco-Nevada acquires royalty and streaming agreements that entitle it to a percentage of production or revenue from producing and developing assets in exchange for upfront or staged financing.

The company's business model centers on providing capital to mining companies in return for a sustained share of production or metal revenue, which can reduce exposure to operating and capital cost risks typical of mine operators.

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