Is FrancoNevada (FNV) Stock Outpacing Its Basic Materials Peers This Year?

For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Franco-Nevada (FNV) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.

Franco-Nevada is one of 255 individual stocks in the Basic Materials sector. Collectively, these companies sit at #8 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Franco-Nevada is currently sporting a Zacks Rank of #1 (Strong Buy).

The Zacks Consensus Estimate for FNV's full-year earnings has moved 14.2% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

According to our latest data, FNV has moved about 17.4% on a year-to-date basis. In comparison, Basic Materials companies have returned an average of 9.2%. This means that Franco-Nevada is performing better than its sector in terms of year-to-date returns.

Another Basic Materials stock, which has outperformed the sector so far this year, is Rio Tinto (RIO). The stock has returned 9.6% year-to-date.

Over the past three months, Rio Tinto's consensus EPS estimate for the current year has increased 17.8%. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Franco-Nevada belongs to the Mining - Gold industry, a group that includes 43 individual stocks and currently sits at #43 in the Zacks Industry Rank. Stocks in this group have gained about 5.3% so far this year, so FNV is performing better this group in terms of year-to-date returns.

In contrast, Rio Tinto falls under the Mining - Miscellaneous industry. Currently, this industry has 73 stocks and is ranked #65. Since the beginning of the year, the industry has moved +9.8%.

Franco-Nevada and Rio Tinto could continue their solid performance, so investors interested in Basic Materials stocks should continue to pay close attention to these stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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