Sprott Inc. (TSX: SII)(NYSE: SII) is proving that precious metals investing can offer aggressive capital appreciation alongside substantial income growth. The company recently reported a record-breaking quarter driven by surging asset values, confirmed a significant double-digit increase to its dividend, and revealed that its assets under management have grown by more than half since the start of the year.
The global asset manager, which specializes in precious metals and critical materials, is firing on all cylinders. Assets under management swelled to $49.1 billion by the end of September, marking a 56% increase from the end of 2024. This surge was not solely the result of rising metal prices; investors are actively pouring fresh capital into the firm's funds. Sprott recorded $1.1 billion in net sales during the third quarter alone, with September standing out as the best sales month in the company's history.
Management is actively sharing this financial success with shareholders. The board declared a third-quarter dividend of $0.40 per common share, representing a massive 33% increase over the previous quarter. With the increase, the stock is now yielding around 1.9%.
However, this level of performance comes with a steep price tag. The stock has skyrocketed by over 90% year to date, pushing its valuation to more than 40 times earnings. While the momentum is undeniable, the premium valuation suggests that high expectations are already baked into the share price, leaving little room for error if the precious metals market cools down.
But given the aggressive payout growth and direct exposure to the booming commodities sector, Sprott can still be an ideal pick for investors over the long haul.
