Royal Gold, Inc. USA) (NASDAQ:RGLD) has made its way into the list of rarely talked about, top performing mid-cap stocks in the S&P 400 Index that has outpaced the industry average growth rate since the beginning of the year. Colorado-based Royal Gold has seen its stock surge in the market by 65% since the beginning of the year and is 90% up, for the past five years. Gold, on the other hand, hit a four-month low in June with analysts expecting a breakout rally to occur as the year closes.
Royal Gold, Inc. USA) (NASDAQ:RGLD) core business entails giving miners of silvers and gold advance financing consequently receiving a cut on the back-end, once the actual metal is extracted.
“If you think of us like a provider of capital in the mining industry, particularly gold and silver mining industry, what we do is provide that capital in exchange for principal and interest like a bank would take,” said Tony Jensen, the CEO of Royal Gold in an interview on Fox Business.
Royal Gold, Inc. USA) (NASDAQ:RGLD) currently owns 200 streaming projects spun on six different continents, but the CEO reiterated that the company remains focused on the American markets. Royal Gold has a great possibility to diversify its investments, taking into consideration the company runs 37 properties that are producing revenue, a key element in the company’s business plan.
Royal Gold, Inc. USA) (NASDAQ:RGLD) according to its CEO, manages its portfolio efficiently because it does not have the operational responsibility of the mines on the back of employing only 20 personnel to manage a $5 billion business portfolio. Royal Gold risks from a business perspective are considerably reduced’ as it does not have to keep up with constant strikes of miners, outages or any operational costs in the mining fields.
“We don’t have to share on the operating costs activities or operating activities and coast associated with the capital. One of the things’ that has pressured miners over the last few years is that capital costs that have gone over budget, operating costs and margins have squeezed, and we just simply don’t have that in our element of business” said Mr. Jensen.
Royal Gold, Inc. USA) (NASDAQ:RGLD)’s royalties are based only on the top line and on the fact that the company has minimal exposure to operating costs with the only worry being the normal wait for production from mines.