Royal Gold’s Reserves Grow Even as Results Lag (RGLD, ABX, KGC, NEM, GG, PAAS, GLD)

For those who believe that the price of gold is going to rise, Royal Gold Inc. (NASDAQ: RGLD) may be worth another look. Shares are essentially flat over the past 12 months, but the company’s results have been outstanding even though they slightly missed estimates for the company’s third fiscal quarter.

The company owns shares of production in mines operated by Barrick Gold Corp. (NYSE: ABX), Kinross Gold Corp. (NYSE: KGC), Newmont Mining Corp. (NYSE: NEM), Goldcorp Inc. (NYSE: GG), and Pan American Silver Corp. (NASDAQ: PAAS) among many others. The company gets a portion of production without the impact of rising costs on production, costs which have bedeviled the miners for some time now.

For the company’s third quarter EPS came in at $0.44 versus a consensus estimate of $0.45. Revenues rose to $69.6 million, compared with an estimate of $69 million. Royal Gold also reported an increase in its gold reserves this morning, from a previous total of 83.9 million ounces of gold and 12.4 billion ounces of silver to 84.5 million ounces of gold and 1.2 billion ounces of silver.

After applying the company’s royalty participation formula, Royal Gold claims its precious metals reserves increased 19% on a gold equivalent basis from December 2010 to December 2011.

The consensus estimate for 2012 EPS is $1.83, growing to $2.32 in 2013. The company’s dividend yield is just 1%, and an increase to the annual $0.15/share dividend would probably help the stock more than another gold strike.

Compared with the SPDR Gold Shares ETF (AMEX: GLD), Royal Gold comes up a little short, with five-year share-price growth of 101% compared with growth of 138% for the ETF.

Royal Gold’s shares hit an all-time high last September near $84 and it’s trading today at $59.65, down about -2.3% from last night’s close. The 52-week range is $55.00-$83.87. Year-to-date shares are down -11.6%, even after a jump above $75/share following a January at-the-market purchase of 4 million shares by Goldman Sachs. Shares could be available at a bargain price real soon now.

Paul Ausick