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NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation.
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Highlights from the ratings report include:
- FNV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 19.75, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for FRANCO-NEVADA CORP is currently very high, coming in at 84.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.15% is above that of the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, FRANCO-NEVADA CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 41.5% when compared to the same quarter one year ago, falling from $36.90 million to $21.60 million.
Franco-Nevada Corporation operates as a gold-focused royalty and stream company in the United States, Canada, Mexico, Australia, and Africa. The company has interests in platinum group metal, oil and gas, and other resource properties. Franco-Nevada has a market cap of $6.91 billion and is part of the basic materials sector and metals & mining industry. Shares are down 17.8% year to date as of the close of trading on Friday.
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