5 Best Gold Royalty and Small-Cap Gold Stocks To Buy

In this article, we discuss 5 best gold royalty and small-cap gold stocks to buy. If you want to see more stocks in this selection, check out 10 Best Gold Royalty and Small-Cap Gold Stocks To Buy. 

5. Osisko Gold Royalties Ltd (NYSE:OR)

Number of Hedge Fund Holders: 18

Osisko Gold Royalties Ltd (NYSE:OR) is a company that purchases and oversees royalties, streams, and other interests in precious metals and other assets in Canada and around the world. Additionally, Osisko Gold Royalties Ltd (NYSE:OR) possesses options for offtake, royalty/stream financings, and exclusive rights to participate in future royalty/stream financings for different projects. On February 23, the company reported a Q4 non-GAAP EPS of C$0.19 and a revenue of C$61.9 million, up 22.2% on a year-over-year basis. It is one of the best gold stocks to invest in. 

According to Insider Monkey’s fourth quarter database, 18 hedge funds were bullish on Osisko Gold Royalties Ltd (NYSE:OR), compared to 20 funds in the prior quarter. Eric Sprott’s Sprott Asset Management is the biggest position holder in the company, with 3.4 million shares worth $41.8 million. 

Palm Valley Capital Management made the following comment about Osisko Gold Royalties Ltd (NYSE:OR) in its Q1 2023 investor letter:

“We did not purchase any new holdings for the Fund during the first quarter. In January, we sold one position: Osisko Gold Royalties Ltd (NYSE:OR). Osisko reported record royalty and streaming revenues as it has steadily grown its portfolio of assets, which is skewed toward Canada—considered to be the highest quality jurisdiction for miners. The company recently deconsolidated the results of mining developer Osisko Development from its financials, clarifying Osisko Royalties’ business model for less familiar investors. Each quarter, we update the company’s NAV based on the underlying value of each of its key royalty and streaming interests, in addition to the net financial assets it holds. Osisko’s share price exceeded our estimate of NAV, so we sold the position.”

4. IAMGOLD Corporation (NYSE:IAG)

Number of Hedge Fund Holders: 18

IAMGOLD Corporation (NYSE:IAG) conducts exploration, development, and operations of gold mining properties located in West Africa and North America. It is one of the premier gold stocks to buy. On May 1, BMO Capital raised IAMGOLD Corporation (NYSE:IAG)’s rating from Market Perform to Outperform and increased the price target to $3.25 from $2. According to the analyst’s research note, IAMGold has experienced a “remarkable financial recovery” in recent months by divesting some of its higher cost and higher risk assets. The firm predicts a forthcoming recovery in operations, but it also noted the risks associated with the startup at Cote.

According to Insider Monkey’s fourth quarter database, 18 hedge funds were bullish on IAMGOLD Corporation (NYSE:IAG), compared to 12 funds in the prior quarter. David Iben’s Kopernik Global Investors is the biggest stakeholder of the company, with 24 million shares worth $62 million. 

3. Royal Gold, Inc. (NASDAQ:RGLD)

Number of Hedge Fund Holders: 22

Royal Gold, Inc. (NASDAQ:RGLD) acquires and manages precious metal streams, royalties, and related interests, primarily consisting of gold, silver, copper, nickel, zinc, lead, and other metals. They finance projects that are in production, development, or exploration stages, and acquire stream or royalty interests in exchange. The company has stream and royalty interests on properties located in various countries such as the United States, Canada, Chile, Australia, Mexico, and others. It is one of the best gold stocks to invest in.

On May 3, Royal Gold, Inc. (NASDAQ:RGLD) reported a Q1 non-GAAP EPS of $0.96, in line with market estimates. Revenue for the period came in at $170.4 million, up 4.9% year-over-year, beating Wall Street consensus by $7.63 million. 

Matthew Murphy, an analyst from Barclays, increased the price target for Royal Gold, Inc. (NASDAQ:RGLD)’s shares from $119 to $122 and maintained an Equal Weight rating. In a research note to investors, Murphy stated that the global economy has exceeded expectations in the first quarter, and the supply side has encountered difficulties. The firm has once again increased its medium-term projections for copper and gold prices, but still anticipates a decline from current levels. As “consolidation takes hold,” the analyst has raised the targets and multiples for base metal prices but continues to favor gold over base equities.

According to Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on Royal Gold, Inc. (NASDAQ:RGLD), compared to 24 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with 3.5 million shares worth $404 million. 

Argosy Investors released its Q1 2021 investor letter and mentioned Royal Gold, Inc. (NASDAQ:RGLD). Here is what the firm said: 

“Gold royalties business achieve 2 objectives for us: 1) It’s a good business model with strong returns through the gold price cycle; and 2) it provides some protection from inflation, should it materialize due to the increasingly loose fiscal and monetary policy decisions the United States (and other developed market economies) is making.

I don’t want to stay on my soapbox for too long, but this is the first time in history that I’m aware of politicians openly stating that debt levels don’t matter, even in the long term. In 2019, the government spent $4.4 trillion. Of those expenditures, $0.4 trillion was spent making interest payments on existing debt at the time of $16.9 trillion. The interest rate on that debt was 2.4%. Debt for 2021 is projected to increase to $22.5 trillion, and then to $33 trillion by the end of the decade.

I don’t have a crystal ball, but if interest rates increased to previously “normal” levels of only 5%, U.S. interest payments would be over $1.1 billion in 2021, 25% of U.S. total expenditures in 2019. In the event that happens, there are a few choices: 1) run a larger deficit which could lead to accelerating debt levels; 2) reduce government spending on things like the military, Medicare, Social Security, pensions, and other programs; or 3) the government allows or encourages inflation to reduce the value of its debt obligations.

To be clear, this spiraling debt outcome currently seems and likely is not happening within the next several years, but the probability of it occurring is not zero and things have changed rapidly before. For that reason, I think an investment in Royal Gold provides some minor insulation against inflation.”

2. Franco-Nevada Corporation (NYSE:FNV)

Number of Hedge Fund Holders: 27

Franco-Nevada Corporation (NYSE:FNV) specializes in royalties and streaming in the gold industry. The company operates in Latin America, the United States, and Canada. Franco-Nevada Corporation (NYSE:FNV) primarily focuses on precious metals including gold, silver, and platinum group metals, and also participates in the selling of crude oil, natural gas, and natural gas liquids. It is one of the best gold stocks to invest in. 

On May 4, Heiko Ihle, an analyst at H.C. Wainwright, increased the target price for Franco-Nevada Corporation (NYSE:FNV)’s shares from $145 to $180 and maintained a Buy rating. The reason for the target price increase is the recent market trends and Franco-Nevada Corporation (NYSE:FNV)’s Q1 results. 

According to Insider Monkey’s fourth quarter database, 27 hedge funds were bullish on Franco-Nevada Corporation (NYSE:FNV), compared to 28 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with more than 2 million shares worth $288.6 million. 

Here is what Horizon Kinetics has to say about Franco-Nevada Corporation (NYSE:FNV) in its Q3 2022 investor letter:

“Back to basic principles. We don’t hold gold in client portfolios, we hold gold royalty companies. The two have surprisingly little in common. The gold royalty company generates very impressive profits even if the gold price never rises, and it earns those profits year after year. Here is a long-term chart of Franco Nevada Corp., the premier gold royalty company vs. gold itself: a comparable gold price today than a decade ago, yet Franco Nevada returned 12.5% annually, matching the S&P 500 return, despite its near sole source of revenues unchanged. What will Franco Nevada’s earnings and share price do if gold rises over the course of a decade?”

1. Wheaton Precious Metals Corp. (NYSE:WPM)

Number of Hedge Fund Holders: 28

Wheaton Precious Metals Corp. (NYSE:WPM)’s main markets are North America, Europe, and South America, where it primarily sells precious metals such as gold, silver, palladium, and cobalt. Wheaton Precious Metals Corp. (NYSE:WPM) is one of the top streaming and royalty companies in the world. On May 4, the company declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on June 2, to shareholders of record on May 19. 

On April 20, Stifel analyst Ingrid Rico raised the firm’s price target on Wheaton Precious Metals Corp. (NYSE:WPM) to C$75 from C$66 and maintained a Buy rating on the shares.

According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Wheaton Precious Metals Corp. (NYSE:WPM), compared to 25 funds in the earlier quarter. Murray Stahl’s Horizon Asset Management is a prominent stakeholder of the company, with 3.4 million shares worth $134.8 million.

First Eagle Investment Management released its Q2 2020 investor letter and mentioned Wheaton Precious Metals Corp. (NYSE:WPM). Here is what the firm said:

“The strength in the price of gold was generally supportive of gold-related equities whose performance historically has been leveraged to the gold price. One such example is Wheaton Precious Metals, a Canadian streaming company that maintains, in our view, a high-quality, low-cost portfolio of precious metal purchase agreements that is well diversified across mining partners, geographies and metal types. Despite pandemic-related suspensions of six of its mining assets, Wheaton posted a 50% year-over-year increase in operating cash flow for the first quarter, which allowed the company to reduce its net debt while raising its quarterly dividend payment.”

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