In modern times, investors looking for a way to profit from gold and other precious metals can choose from a very unique and different group of gold stocks: royalty and streaming companies.
In exchange for up-front payments to the gold mining companies, royalty and streaming companies get rights to gold, silver, and other precious metals at present prices or receive a percentage of mineral production from a mine. This makes companies like Royal Gold (NASDAQ:RGLD), Franco-Nevada (NYSE:FNV), and Wheaton Precious Metals (NYSE:WPM) less subject to the significant capital costs of sustaining operations at a mine, or the varying price of the metal.
Gold miners are certainly worth considering if you are interested in gaining exposure to gold and silver, but gold royalty and streaming companies offer much more compelling investment opportunities because of their higher dividends, excellent free cash flow generation, and high profit margins. In addition, between Royal Gold, Franco-Nevada, and Wheaton Precious Metals, investors have several choices that give them varying degrees of exposure to gold, silver, and other precious metals.