3 Reasons Royal Gold Inc. Stock Could Rise Further in 2017
Every gold and silver company will see its sales, profits, and growth prospects rise and fall in connection with the prices of precious metals. But unlike most of them, Royal Gold Inc. (NASDAQ: RGLD) can endure falling gold prices without as much pain on the bottom line, thanks to its business model of streaming. That partly explains why Royal Gold share are crushing those of pure miners like Barrick Gold (NYSE: ABX): It's now up almost 26% year to date, while Barrick Gold shares are hovering just below where they started 2017.
But Royal Gold is also handily outperforming its streaming peers this year: Wheaton Precious Metals (NYSE: WPM) is barely in the green, and Franco-Nevada Corp (NYSE: FNV) is up about 20% year to date. If that makes you wonder whether there's any steam left in Royal Gold's recent rise, here are three solid reasons why the stock could move even higher in the coming months.
Gold prices may fluctuate, but miners can ramp up volumes to offset the impact of lower prices on their top lines. Royal Gold's gold equivalent ounces (GEOs) jumped 11% year over year to 87,700 ounces during its fiscal third quarter, which ended March 31, pushing its revenue up 14% even as its realized gold price moved up only about 3% during the period. Note that by volumes, I don't really mean production here, but rather the metals that Royal Gold buys from miners like Barrick Gold.
Source: Fool.com
Barrick Gold Corp Stock
Barrick Gold Corp is currently one of the favorites of our community with 6 Buy predictions and no Sell predictions.
As a result the target price of 17 € shows a slightly positive potential of 9.2% compared to the current price of 15.57 € for Barrick Gold Corp.
