One-glance verdict
Overvalued
$78.16 our estimate vs market $242.14
Wall Street consensus: $282.36 (261.3% higher than our fair-value estimate)
210% above our estimate, beyond the bull case
Fundamentals snapshot
Franco-Nevada Corporation
FNV · NYQ · Basic Materials · Gold
Current price
$242.14
52-week range
$185.52 - $285.67
Market cap
$46.70B
Balance sheet
Healthy
4,336.33x Strong cushion
Net cash $1.01B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 63.7% last year.
- Reward Returns 19.9% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 3/10 years.
What this company does
Franco-Nevada Corporation
Franco-Nevada Corporation is a bit like a landlord for mining companies; instead of owning mines directly, they own the rights to receive a portion of the valuable metals or energy produced from those mines, which is their main source of income. This model allows them to generate steady money, known as recurring revenue (income that is expected to continue regularly), without the headaches of actually digging for the resources themselves. Their business matters because it provides investors with a way to bet on the success of mining and energy projects without taking on all the direct operational risks.
How the company got here
Franco-Nevada Corporation was founded in 1983, originally as Franco-Nevada Mining, and was a pioneer in applying the royalty model, common in the oil and gas industry, to precious metals. The company's early success included identifying the Ken Snyder deposit in Nevada, which had such a high silver credit that it effectively covered all operating costs, creating a 100% gold royalty. This early success demonstrated the power of the royalty business model. After a period where the original company was sold and integrated into Newmont Mining, the current Franco-Nevada was relaunched in 2007, building on its legacy and expanding its portfolio of royalties and streams. This strategic approach allows the company to gain exposure to precious metals and other commodities without the complexities and risks of directly operating mines.
What it actually does
Franco-Nevada doesn't mine for gold or any other metals itself. Instead, it's a royalty and streaming company. Think of it like owning a piece of a property and collecting rent, but instead of rent, Franco-Nevada collects a percentage of the minerals or revenue generated from mines owned and operated by other companies. They acquire these rights, often for a significant upfront payment, and in return, they receive a portion of the mine's output or revenue over the long term. This business model allows Franco-Nevada to benefit from the success of mining operations without the day-to-day responsibilities and risks associated with running a mine, such as managing labor, equipment, and environmental regulations.
Precious Metals
This is Franco-Nevada's largest and most important business segment. The company holds a vast portfolio of royalties and streams on gold, silver, and platinum group metals (PGMs). These agreements mean that when a mining company extracts these precious metals from a property where Franco-Nevada holds a royalty or stream, Franco-Nevada receives a portion of the revenue or a pre-agreed amount of the metal itself. This segment provides the company with significant exposure to the price of gold and other precious metals, and it's the primary driver of Franco-Nevada's overall revenue.
Other Mining
Beyond precious metals, Franco-Nevada also has a diversified portfolio of royalties and streams related to other types of mining operations. This can include metals like copper or iron ore. While smaller than the precious metals segment, these 'other mining' assets provide additional diversification, spreading the company's revenue sources across different commodities and mining projects. This helps to reduce the overall risk by not being solely dependent on the performance of gold and silver mines.
Energy
Franco-Nevada also holds royalties and streams related to energy production, specifically oil and natural gas. In this segment, the company receives a percentage of the revenue generated from the sale of these commodities. This part of the business offers further diversification, as energy prices don't always move in the same direction as precious metal prices. By having exposure to both mining and energy, Franco-Nevada aims to create a more stable and resilient revenue stream.
What management is betting on now
Franco-Nevada's core strategy is to continue growing its portfolio of royalties and streams, focusing on acquiring high-quality assets with long-term potential. Management is committed to maintaining a diversified portfolio across different commodities, geographies, and stages of development to minimize risk. They aim to provide investors with exposure to commodity price fluctuations and exploration upside while limiting the company's exposure to the operational costs and risks inherent in mine ownership. A key priority is to maintain a strong balance sheet and pay dividends, making Franco-Nevada an attractive investment for a broad range of investors.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $78.16 vs current price $242.14
Wall Street consensus is the average analyst price target: $282.36 (261.3% higher than our fair-value estimate).
Our most-likely fair value is $78.16 a share — about 67.7% below today's price of $242.14, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $1.0B - more cash than debt. Interest coverage 4336.3x.
Net debt
$-1.01B
Interest coverage
4,336.33x
Franco-Nevada Corporation's profit covers its interest bill about 4336.3 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
FNV
BASELINE
Franco-Nevada Corporation
Total debt $0.00 Interest coverage 4,336.33x This is the baseline the peer rows are being compared against.
Total debt $1.98B Interest coverage 3,686.81x -15% vs FNV Has roughly the same debt cushion as FNV.
Total debt $395.89M Interest coverage 22.90x -99% vs FNV Carries about 189.3x less debt cushion than FNV.
Total debt $219.28M Interest coverage 45.20x -99% vs FNV Carries about 95.9x less debt cushion than FNV.
Total debt $236.19M Interest coverage 51.34x -99% vs FNV Carries about 84.5x less debt cushion than FNV.
Total debt $14.66M Interest coverage -0.04x -100% vs FNV This peer has almost no interest-payment cushion compared with FNV.
What you should know
The case for and against FNV
3 Rewards
0 Risks
Rewards
-
Revenue grew 63.7% last year.
-
Returns 19.9% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
31.65x
Forward P/E
27.34x
P/B
5.67x
P/S
20.30x
EV/EBITDA
20.40x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
92.1%
Operating margin
77.0%
Net margin
64.2%
ROE
19.9%
ROA
13.7%
Health
Liquidity and balance-sheet strength
Debt / equity
—
Current ratio
9.38x
Quick ratio
8.60x
Total debt
$0.00
Total cash
$1.01B
Growth
How the business has been compounding
Revenue TTM
$2.30B
Revenue 5Y CAGR
11.5%
EPS TTM
7.65
EPS 5Y CAGR
16.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.49B
Free CF TTM
$-703.00M
FCF margin
-30.6%
Dividend
Shareholder payout
Yield
0.8%
Payout ratio
21.4%
Last ex-div date
2026-09-10