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What’s Driving Franco-Nevada’s Stock Price Up?

Franco‑Nevada’s stock jumped 71% as record gold prices and a blockbuster quarter fattened revenue, cash flow, and acquisition firepower.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 26, 2025 11:45 am EDT

Key Points

Surging gold prices boosted revenue and margins, since Franco‑Nevada earns royalties without operating‑cost exposure.
A standout quarter left $1.1 billion to fund acquisitions and support the dividend.
Shares trade at premium multiples, so watch gold prices, GEO deliveries, and deal execution for downside risk.

A lot of the time, we might look at a company rising in share price and think, “What’s going on here?” The fear that we’re missing out can be strong, even leading some investors to buy before they truly understand a company’s increase in share price.

That’s what’s happening with Franco-Nevada (TSX: FNV). The royalty and streaming company has seen shares surge 71% in the last year, so what’s going on exactly? Today, let’s take a look at this top gold stock on the TSX and whether it belongs in your long-term portfolio.

todder holds a gold bar — Source: Getty Images

Growing gold

Perhaps the biggest driver for this mining stock is the price of gold. FNV is a royalty and streaming company, so higher metal prices flow straight to the top line without increases in operating costs. This was seen in the second quarter, with record gold prices materially boosting revenue and margins.

In fact, the precious-metal weighting and gold-equivalent ounce (GEO) rose significantly. Precious metals were 82% of revenue in the quarter, with 70% gold alone. When gold outperforms other commodities, FNV’s reported GEO’s translate to higher revenue. GEOs sold were 2% higher, but with the price moves, this still drove a huge increase for the royalty company.

Fantastic quarter

Yet gold wasn’t the only reason driving the jump. The second quarter was outstanding, with revenue jumping 42% year over year to $369.4 million. Operating cash flow surged 121% to $430.3 million and net income 211% to $247.1 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 65% to $365.7 million.

These quarterly improvements show a business that’s making higher-quality investments. Plus, its strong operating cash flow translated to $1.1 billion in available capital. This allows the gold stock to have more room for mergers and acquisitions and to sustain the dividend. Near-term, the gold stock expects higher GEO deliveries for the second half of the year, reducing risk and supporting the premium price.

Value and income

So the question now is whether the gold stock is still a buy. Here’s what investors will want to consider. First, it offers a strong dividend, though a small yield at 0.71% or $2.10 annually. However, even with low operating risk and high cash flow, the premium looks priced in, trading at 36.4 times earnings and 31 times sales, far higher than that of other miners.

What investors will want to watch are continued higher gold prices, confirmed production and delivery, plus other acquisitions. Risks, however, could be a sustained decline in gold prices, delays from deliveries, or regulatory disputes. These have happened before, and could again.

Bottom line

FNV is a gold stock that seems to be on the rise and only rising higher, for now. It benefits from a class mix of commodity tailwinds and company execution, with record gold prices and high cash-flow leverage. While the quarter delivered record results, there is always the risk of a drop in the price of gold. So if you’re interested, continue to keep this gold stock on your watchlist.