Franco-Nevada (TSX:FNV) inventory has been a star performer thus far in 2025, surging 64% 12 months thus far and hitting new 52-week highs. With bullion costs setting new data above US$3,600 an oz. and silver reaching document highs this 12 months, the dear metals royalty firm is experiencing its finest time within the inventory market. However buyers are questioning: has the ship sailed, or is that this high Canadian gold inventory nonetheless a purchase in September 2025?

A golden enterprise mannequin shining brighter

Franco-Nevada isn’t a typical mining inventory. It’s a royalty and streaming firm, which suggests it supplies upfront funding to mining operators in alternate for the best to purchase metals at a (normally low) mounted value sooner or later or obtain a proportion of income from the mine. This distinctive construction permits it to learn from excessive metallic costs with out being uncovered to the crippling working value inflation, labour disputes, and different operational complications that usually plague conventional mining firms.

The corporate’s second-quarter outcomes had been a testomony to this mannequin’s energy. Income soared 42% 12 months over 12 months to a document $369.4 million, and working money stream exploded by 121% to $430.3 million. This was pushed primarily by hovering gold costs, as the quantity of gold equal ounces (GEOs), a standardized measure combining all metallic and power manufacturing, solely grew by a modest 2%. This operational leverage is a key purpose Franco-Nevada’s working and internet revenue margins are so excessive.

Franco-Nevada’s progress engine: Acquisitions gas future earnings and money stream

Franco-Nevada’s administration has been aggressively deploying capital to safe future progress. Latest acquisitions are a significant purpose for optimism. The corporate spent over $1 billion to accumulate a royalty on the Côté Gold Mine in Ontario, one in every of Canada’s latest large-scale mines. It additionally picked up a royalty on the extremely promising Arthur Mission in Nevada and elevated its stake within the Gold Quarry mine.

These strategic strikes, paid for with a robust stability sheet boasting over $1.1 billion in accessible capital, will probably be key drivers for elevated manufacturing within the second half of 2025 and past.

The corporate guides for a whopping 40% year-over-year income enhance for the complete 12 months 2025. With 120 belongings already producing money stream and one other 38 in superior improvement, its income pipeline is flush with potential.

Valuation: FNV inventory is costly, however with a premium justification

There’s no sugarcoating it: Franco-Nevada inventory is dear. With a ahead price-to-earnings (P/E) ratio of 49.2, it trades at a major premium to the common gold trade inventory (with a P/E of 26.3). Nonetheless, you typically get what you pay for.

Franco-Nevada inventory’s valuation premium displays its superior, low-risk enterprise mannequin, its stellar progress profile, and its pristine debt-free stability sheet. It’s additionally nonetheless cheaper than its closest peer, Wheaton Treasured Metals, which has a P/E of 60.

Buyers looking for a hedge towards market volatility and inflation with out the operational dangers of mining might discover the premium nicely value it.

That mentioned, FNV isn’t that a lot of an revenue investor’s pal proper now. Its quarterly dividend yields 0.8% regardless of will increase for 18 consecutive years. However for IPO buyers, the yield on unique value is within the double-digit vary now.

Is Franco-Nevada inventory nonetheless a purchase?

So, is Franco-Nevada inventory nonetheless a purchase after its spectacular run? The reply is a cautious sure, however with a technique. Chasing any inventory at 52-week highs could be dangerous. The corporate’s outlook is undoubtedly vibrant, powered by excessive gold costs and shrewd acquisitions. Nonetheless, if metallic costs had been to fall, the inventory may see a pullback. The best entry level for brand new cash could be on any market-driven dip. That mentioned, long-term buyers searching for a low-risk method to maintain gold and a high Canadian gold inventory to purchase in September should discover Franco-Nevada a premier alternative. Its distinctive mannequin acts as a robust hedge, and its progress story is much from over.