Are Smart Investors Making the Right Decision? Royal Gold Inc. (RGLD)

Royal Gold Inc. (NASDAQ: RGLD) stock jumped 0.96% on Friday to $102.69 against a previous-day closing price of $101.71. With 1.0 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.54 million shares. During the session, the Gold company that operates in wider Basic Materials sector, reached to the highest price of $103.25 whereas the lowest price it dropped to was $98.22. The 52-week range on RGLD shows that it touched its highest point at $147.70 and its lowest point at $92.01 during that stretch. It currently has a 1-year price target of $145.00. With its current market cap of 6.67 billion, RGLD has annualized dividend of $1.40 while the current yield stands at 1.36%. Beta for the stock currently stands at 0.62.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RGLD was down-trending over the past week, with a drop of -1.73%, but this was down by -3.72% over a month. Three-month performance dropped to -22.91% while six-month performance fell -1.19%. The stock lost -13.39% in the past year, while it has lost -2.40% so far this year. A look at the trailing 12-month EPS for RGLD yields 4.35 with Next year EPS estimates of 4.35. For the next quarter, that number is 0.91. This implies an EPS growth rate of -54.30% for this year and 16.11% for next year. EPS is expected to grow by 1.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 6.30%.

Float and Shares Shorts:

At present, 65.57 million RGLD shares are outstanding with a float of 65.46 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.09 million, which was 3.18% higher than short shares on Jun 14, 2022. In addition to Mr. William H. Heissenbuttel as the firm’s Pres, CEO & Director, Mr. Paul K. Libner serves as its CFO & Treasurer.

Institutional Ownership:

Through their ownership of 82.63% of RGLD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.52% of RGLD, in contrast to 4.39% held by mutual funds. Shares owned by individuals account for 25.95%. As the largest shareholder in RGLD with 12.14% of the stake, Capital Research & Management Co holds 7,968,897 shares worth 7,968,897. A second-largest stockholder of RGLD, The Vanguard Group, Inc., holds 6,470,042 shares, controlling over 9.86% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in RGLD, holding 5,185,483 shares or 7.90% stake. With a 5.27% stake in RGLD, the VanEck Gold Miners ETF is the largest stakeholder. A total of 3,459,822 shares are owned by the mutual fund manager. The American Balanced Fund, which owns about 4.54% of RGLD stock, is the second-largest Mutual Fund holder. It holds 2,979,000 shares valued at 318.1 million. Vanguard Total Stock Market Index holds 2.95% of the stake in RGLD, owning 1,935,653 shares worth 206.69 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RGLD since 14 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RGLD analysts setting a high price target of $165.00 and a low target of $110.00, the average target price over the next 12 months is $141.67. Based on these targets, RGLD could surge 60.68% to reach the target high and rise by 7.12% to reach the target low. Reaching the average price target will result in a growth of 37.96% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. RGLD will report FY 2022 earnings on 02/08/2023. Analysts have provided yearly estimates in a range of $4.40 being high and $3.21 being low. For RGLD, this leads to a yearly average estimate of $3.66. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Royal Gold Inc. surprised analysts by -$0.09 when it reported $0.81 EPS against a consensus estimate of $0.90. The surprise factor in the prior quarter was $0.12. Based on analyst estimates, the high estimate for the next quarter is $0.95 and the low estimate is $0.76. The average estimate for the next quarter is thus $0.88.

Dividends & Yield:

In terms of dividends, RGLD has a current ratio of $1.4, which is $1.4 over the trailing 12-months, while a dividend of $1.08 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and RGLD currently yields $1.31. In the past year, RGLD’s dividend yield has been $1.31, but when looking at the stock over the past five years, its yield has been $1.07. Accordingly, RGLD has a current buyback yield of $0.01. This was $0.01 for the TTM, and it was $0.04 for the past five years.

Summary of Insider Activity:

Insiders traded RGLD stock several times over the past three months with 3 Buys and 3 Sells. In these transactions, 4,000 shares were bought while 4,000 shares were sold. The number of buy transactions has increased to 23 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 45,848 while 12,012 shares were sold.

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