Assessing the Upcoming Dividend and Historical Performance of RGLD
Royal Gold Inc(RGLD, Financial) recently announced a dividend of $0.4 per share, payable on 2024-04-19, with the ex-dividend date set for 2024-04-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Royal Gold Inc's dividend performance and assess its sustainability.
What Does Royal Gold Inc Do?
Royal Gold Inc enquires and manages precious metal royalties and streams, with a focus on gold. The company operates by purchasing a percentage of the metal produced from a mineral property for an initial payment, without assuming responsibility of mining operations. Similarly, precious metal streams are purchase agreements with mine operators providing the right to purchase all or a portion of one or more metals produced from a mine, in exchange for an upfront deposit payment. Generally, Royal Gold does not conduct any work on the properties in which it holds royalty and streaming assets. The company owns a portfolio of producing, development, evaluation, and exploration royalties and streams, and the majority of group revenue is generated from Canada, Mexico, Chile, and the United States.
A Glimpse at Royal Gold Inc's Dividend History
Royal Gold Inc has maintained a consistent dividend payment record since 2000. Dividends are currently distributed on a quarterly basis. Royal Gold Inc has increased its dividend each year since 2000. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 24 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Royal Gold Inc's Dividend Yield and Growth
As of today, Royal Gold Inc currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.31%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Royal Gold Inc's annual dividend growth rate was 11.30%. Extended to a five-year horizon, this rate decreased to 9.40% per year. And over the past decade, Royal Gold Inc's annual dividends per share growth rate stands at 6.70%.
Based on Royal Gold Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Royal Gold Inc stock as of today is approximately 1.96%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Royal Gold Inc's dividend payout ratio is 0.42.
Royal Gold Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Royal Gold Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Royal Gold Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Royal Gold Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Royal Gold Inc's revenue has increased by approximately 6.60% per year on average, a rate that underperforms approximately 60.37% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Royal Gold Inc's earnings increased by approximately 6.20% per year on average, a rate that underperforms approximately 53.92% of global competitors.
The company's 5-year EBITDA growth rate of 31.90%, which underperforms approximately 16.52% of global competitors.
Next Steps
In conclusion, the analysis of Royal Gold Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paints a picture of a company with a history of consistent dividend payments and a commitment to increasing dividends over time. The payout ratio indicates that dividends are well-covered by earnings, and the company's profitability and growth metrics suggest a stable future. However, with growth rates that underperform a significant portion of global competitors, investors should keep a keen eye on the company's future performance to ensure that dividend sustainability remains intact. Royal Gold Inc remains an attractive option for value investors seeking steady income with the potential for growth.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
