Royal Gold RGLD

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One of the Greatest Gold-Stock Performances in Recent History By Matt Badiali

Over the past 10 years, one gold stock has outperformed the market.

It has returned more than blue chips like oil giant ExxonMobil, technology-service provider IBM, and even Warren Buffett's own Berkshire Hathaway.

Its share price has soared more than 230%… while the S&P 500 has only climbed 82%.

And if gold manages to rally in the coming years, it's going to perform even better…

The company I'm talking about is Royal Gold (RGLD).

Regular readers are familiar with precious-metal royalty companies. These companies mine no metals of their own. Instead, they finance early stage mining projects or buy existing royalties. When the mine begins producing, the royalty company gets a cut of the cash flow.

Think of it this way… One company finds raw land, builds a new housing development, and then draws in people to rent. It manages the development and chases down delinquent payers.

This company takes enormous risks. It lays out huge investments and hopes that it will eventually get its money back. Royalty companies aren't like that.

Royalty companies essentially invest after the houses are full of renters… they just show up on rent day and get a check for their share.

The royalty business model shields these companies from swings in the price of gold more than regular gold miners. That's why even though the price of gold fell more than 15% over the past two years, Royal Gold's share price still rose more than 20%.

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The royalty business model also allows royalty companies to benefit from low gold prices. With gold prices down around 37% from their 2011 peak, many gold miners are desperate for cash. That means royalty companies like Royal Gold have been able to "buy low"… paying less for future royalties from mines. When gold prices increase, so will the value of their royalties… which will go straight to royalty companies' bottom lines.

And gold prices are likely headed higher…

You see, world banks are printing massive amounts of money right now. Europe, Japan, and China have all followed the U.S.'s lead in adding money to their systems to boost their economies. By doing this, they're devaluing their currencies. For example, the euro has fallen 29% versus the dollar in the past year. And Japan's yen has declined 17% against the dollar in the same time frame.

When a paper currency falls in value, it takes more of it to buy gold.

Unlike paper currency, you can't just print more gold. There's a finite amount of it in the world. According to metals-markets research firm Thomson Reuters GFMS's gold survey, just 171,300 metric tons of gold (equal to a 68-foot cube) has ever been produced. The British Broadcasting Corporation (BBC) says you can also think of this cube as being the length and width of a tennis court, and about 32 feet high.

With the world's governments continuing to print more and more paper money, it will take more and more of it to buy gold. That's why I expect we'll soon see a massive rally in gold prices. And higher gold prices will be great for royalty companies like Royal Gold.

Source: www.growthstockwire.com

[winston]

not vested

THE GOLD STOCK THAT BEATS ALL GOLD STOCKS

Today, we take a look at one of our favorite business models in the world...

Regular DailyWealth readers know we're big fans of precious metals royalty companies. Porter has called them "the absolute best way to invest in almost any industry or trend," and for good reason.

Rather than betting the company on a single mine, royalty firms finance early stage mining projects and collect money when these projects work out.

One of our favorite names in the sector is Royal Gold (RGLD). The $4 billion royalty firm owns stakes in nearly 40 mines currently in production, and in another two dozen or so that are currently in development.

As you can see from the following chart, while the big gold-miners fund GDX (blue line) is up around 100% over the last five months, Royal Gold (black line) has outperformed handily. It's yet more proof that royalty companies are the safest ways to invest in gold stocks today...

Source: Daily Wealth

[winston]

not vested

Royal Gold

This is a solid stock for investors looking for a gold presence with somewhat less risk.

Royal Gold Inc. (NASDAQ: RGLD) is a precious metals royalty and stream company engaged in the acquisition and management of precious metal royalties, streams and similar production-based interests.

The company owns interests on 193 properties on six continents, including interests on 38 producing mines and 24 development stage projects.

Many on Wall Street feel that the company is very undervalued when compared to its sector peers. Backed by three new or expanding assets, Royal Gold’s revenue could grow by 13% to nearly $500 million by fiscal 2019.

Royal Gold’s strong liquidity position also means it can compete for royalty and stream acquisitions.

For first quarter of fiscal 2018, the company reported earnings per share that were better and expected. The revenue figure was helped by several assets that performed better than expected.

Thanks to strong free cash flow and $800 million available under its revolver, Royal Gold has the liquidity to pursue new deals.

Investors receive a $1.10% dividend. Oddly, the RBC price target is $89, while the consensus target is $94.25. Shares closed Thursday at $87.59.

Source: 24-7 Wall Steet