U.S. Global Investors, Inc. is a publicly owned investment manager. The firm primarily provides its services to investment companies. It also provides its services to pooled investment vehicles. The firm manages equity and fixed income mutual funds for its clients. It also manages hedge funds. The firm also manages exchange traded funds. It invests in the public equity and fixed income markets across the globe. It invests in G.A.R.P. and value stocks to make its equity investments. The firm employs a fundamental and quantitative analysis with top-down and bottom-up stock picking approach to make its investments. U.S. Global Investors, Inc. was founded in 1968 and is based in San Antonio, Texas.

U.S. Global Investors, Inc.

Financial Services

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends monthly, which may appeal to investors valuing a regular income stream. 

GROW reported revenue of USD 9mn in the last 12 months, up 148% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 76% from FY24 to USD 0.01.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 6ppts and its growth decelerated by 1ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 4ppts and its growth decelerated by 1ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -9.3% in the last 12 months, up from -10.7% in FY24. 

Historically, GROW has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.8%, down from 14.2% in FY24. 

In the last 12 months, the return on capital employed (RoCE) declined to 0.3%, below the peers. 

U.S. Global Investors, Inc. reported a return on equity (RoE) of 0.3% in the last 12 months, down from 1.0% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 0.3% in the last 12 months, a decrease from 1.0% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.2 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

GROW has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and is somewhat unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, weak debt servicing capacity, and inadequate interest coverage. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, GROW is highly volatile. In other words, the stock will fall substantially more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be significant. 

In normal market circumstances, GROW is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to substantial. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is 'expensive' on P/E. 

U.S. Global Investors, Inc.

$ 2.23

2

U.S. Global Investors, Inc.

$ 2.23

2

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 2.23

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