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Here's How Much You'd Have If You Invested $1000 in Royal Gold a Decade Ago

Zacks Equity Research
Updated ·4-min read

How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Royal Gold (RGLD) ten years ago? It may not have been easy to hold on to RGLD for all that time, but if you did, how much would your investment be worth today?

Royal Gold's Business In-Depth

With that in mind, let's take a look at Royal Gold's main business drivers. Based in Denver, CO, Royal Gold, together with its subsidiaries, acquires and manages precious metals stream and royalty interests, with a primary focus on gold. Royal Gold manages its business under two segments:

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Acquisition and Management of Stream Interests — A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. As of Dec 31, 2022, Royal Gold owned interests in 186 properties on five continents, including 40 producing mines and 20 projects in the development stage.

Acquisition and Management of Royalty Interests — Royalties are non-operating interests in mining projects which provide the right to revenues or metals produced from the project after deducting specified costs, if any.

The company’s financial results are primarily tied to the price of gold, silver, copper, and other metals. Gold contributed 71% to its revenues in first-quarter 2022.

In February 2019, Royal Gold entered into a silver mine life purchase agreement with Khoemacau Copper Mining Limited (KCM), subsidiary of Cupric Canyon Capital LP. The agreement highlights the purchase and sale of silver, produced from the Khoemacau Copper Project in Botswana. Khoemacau is expected to produce approximately 62,000 tons of copper and 1.9 million ounces of silver annually over a 21-year mine life.

As of Dec 31, 2021, Royal Gold completed the change in fiscal year-end from Jun 30 to Dec 31 to match the company’s reporting and disclosure with a majority of its stream and royalty counterparties and the precious metals sector.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Royal Gold a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in April 2013 would be worth $2,734.45, or a gain of 173.44%, as of April 18, 2023, according to our calculations. This return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 167.48% and the price of gold went up 38.15% over the same time frame.

Looking ahead, analysts are expecting more upside for RGLD.

Royal Gold has been benefiting from its acquisitions and strong business model. Despite persistent inflationary pressures in the broader economy, the company has been maintaining high margins. However, higher interest costs have a negative impact on the company's performance. Lower gold and copper sales at Andacollo, Pueblo Viejo, and Peasquito are offset by higher gold and copper sales at Mount Milligan and Cortez. Volatility in gold and silver prices is likely to aggravate the situation. Nonetheless, revenues from new acquisitions will boost Royal Gold’s performance. Royal Gold’s available liquidity will allow the company to continue advancing its portfolio. The company projects stream segment sales of 54,000-59,000 GEOs for the March-end quarter of 2023. Earnings estimates for 2023 have, thus, undergone positive revisions lately.

Over the past four weeks, shares have rallied 10.30%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.

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Royal Gold, Inc. (RGLD) : Free Stock Analysis Report

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Zacks Investment Research