Personal Finance

Will Royal Gold, Inc. Raise Its Dividend in 2017?

RGLD Dividend Chart

The mining industry isn't known as a hotbed of dividend stocks , but Royal Gold (NASDAQ: RGLD) has carved out a lucrative niche that has made income investors quite happy throughout its history. Royal Gold is a streaming company, following a business model that involves purchasing royalty interests and entering into streaming agreements with miners. This gives Royal Gold exposure to gold prices while insulating it from the operational challenges that mining companies have to deal with constantly. By growing its assets over time, Royal Gold has produced more income, and it has shared that income in the form of rising dividends. Let's look more closely to see whether Royal Gold can keep up the pace for another year in 2017.

RGLD Dividend Chart

RGLD Dividend data by YCharts .

Since 2012, precious metals prices have fallen dramatically, but that hasn't stopped Royal Gold from continuing to make annual dividend increases, albeit in smaller amounts. The company declared its latest $0.01 per share increase last November, taking effect with its most recent dividend payment.

What could boost Royal Gold's future prospects?

The most obvious thing that could help Royal Gold is for the price of precious metals to start climbing again. 2016 was a solid year for gold, which posted an 8% rise, and prices of the yellow metal have climbed slightly so far in 2017 as well. If those trends continue, then Royal Gold will stop having to take asset impairment charges and should see its net earnings return to positive territory. The prospect for rising income should have an upward influence on future dividend actions.

However, one thing to note is that if the gold market rises sharply, it could spur more immediate investment opportunities for Royal Gold. That paradoxically could result in less impetus for a dividend increase in the short run, as internal investment would represent a better use of available capital. However, one would expect even better long-term growth as a result of such moves.

Will Royal Gold raise its dividend in 2017?

From one viewpoint, Royal Gold has already raised its dividend in 2017, because the payout declaration the board of directors made in November took effect with the company's January dividend payment. Yet barring an unforeseen collapse in the precious metals markets during the remainder of the year, it's very likely Royal Gold will make the same decision toward the end of 2017 to extend its streak of dividend increases to 18 years.

10 stocks we like better than Royal Gold

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Royal Gold wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 4, 2017.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

RGLD

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More