FRANCO NEVADA Corp (NYSE: FNV)

Sector: Basic Materials Industry: Gold CIK: 0001456346
Market Cap 48.16 Bn
P/B 6.88
P/E 52.35
P/S 31.14
ROIC (Qtr) 12.33
Div Yield % 0.45
Rev 1y % (Qtr) 76.90
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
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About

Investment thesis

Bull case

  • Strong operating cash flow of 1.31B provides 47.30x coverage of SG&A expenses 27.70M, showing efficient operational cost management.
  • Operating cash flow of 1.31B provides strong 218.37x coverage of stock compensation 6M, indicating sustainable incentive practices.
  • Operating cash flow of 1.31B provides exceptional 436.73x coverage of interest expenses 3M, showing strong debt service capability.
  • Free cash flow of (856.30M) provides excellent 3.21x coverage of dividends (266.60M), indicating sustainable shareholder returns.
  • Robust tangible asset base of 7.52B provides 17.66x coverage of working capital 425.60M, indicating strong operational backing.

Bear case

  • Operating cash flow of 1.31B barely covers its investment activities of (2.13B), with a coverage ratio of -0.62, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.31B provides thin coverage of dividend payments of (266.60M) with a -4.91 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 190.70M relative to inventory of 10.30M (18.51 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (856.30M) provides weak coverage of capital expenditures of 2.17B, with a -0.40 ratio suggesting additional external financing needs for growth initiatives.
  • Tax assets of 24.10M provide limited offset against tax liabilities of 443M, which is 0.05x, indicating potential future cash flow pressure from tax obligations.

Geographical areas [axis] Breakdown of Revenue (2024)

Products and services [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Gold
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AEM Agnico Eagle Mines Ltd 106.87 Bn 23.96 8.98 0.32 Bn
2 NEM NEWMONT Corp /DE/ 100.23 Bn 25.64 9.43 5.65 Bn
3 B Barrick Mining Corp 79.50 Bn 15.92 4.69 4.70 Bn
4 WPM Wheaton Precious Metals Corp. 64.59 Bn 64.49 35.29 0.01 Bn
5 FNV FRANCO NEVADA Corp 48.16 Bn 52.35 31.14 0.00 Bn
6 KGC Kinross Gold Corp 41.29 Bn 23.47 6.41 1.24 Bn
7 PAAS Pan American Silver Corp 20.44 Bn 32.24 6.28 0.86 Bn
8 AGI Alamos Gold Inc 18.08 Bn 33.57 11.23 0.28 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 6.38 3.33
EV to Cash from Ops. EV/CFO 36.63 -11.32
EV to Debt EV to Debt 0.00 525.64
EV to EBIT EV/EBIT 40.92 17.81
EV to EBITDA EV/EBITDA 35.90 3.39
EV to Free Cash Flow [EV/FCF] EV/FCF -56.05 11.13
EV to Market Cap EV to Market Cap 1.00 1.25
EV to Revenue EV/Rev 31.03 8.35
Price to Book Value [P/B] P/B 6.88 5.92
Price to Earnings [P/E] P/E 52.35 32.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.45 1.59
Dividend Payout Ratio % Div Payout % (Qtr) 23.50 5.12
Dividend per Basic Share Div per Share (Qtr) 1.12 0.17
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -25.20 9.95
Interest Coverage Int. cover (Qtr) 390.97 407.12
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -354.57 -96.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -82.03 134.81
Dividend Growth (1y) % Div 1y % (Qtr) -21.13 -5.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 253.21 487.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 627.96 54.68
EBIT Growth (1y) % EBIT 1y % (Qtr) 382.35 679.83
EBT Growth (1y) % EBT 1y % (Qtr) 379.81 193.12
EPS Growth (1y) % EPS 1y % (Qtr) 250.47 248.58
FCF Growth (1y) % FCF 1y % (Qtr) -317.67 147.05
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 54.22 84.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.26
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.03
Cash Ratio Cash Ratio (Qtr) 2.02 3.07
Current Ratio Curr Ratio (Qtr) 4.64 4.82
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.28
Interest Cover Ratio Int Coverage (Qtr) 390.97 407.12
Times Interest Earned Times Interest Earned (Qtr) 390.97 407.12
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 93.90 -19.62
EBIT Margin % EBIT Margin % (Qtr) 75.84 -44.48
EBT Margin % EBT Margin % (Qtr) 75.65 -34.17
Gross Margin % Gross Margin % (Qtr) 72.00 30.57
Net Profit Margin % Net Margin % (Qtr) 59.50 -40.06