Updated on April 2nd, 2025 by Felix Martinez
Exchange-traded funds and mutual fund providers have consolidated heavily in recent years. The number of these independent companies has dwindled via mergers, and the ones that are left are generally not considered income stocks.
U.S. Global Investors, Inc. (GROW) pays a dividend that is well above that of the S&P 500 average yield. In addition, the company pays its dividends monthly instead of quarterly or semi-annually, allowing more frequent payments for investors who purchase stocks primarily for income.
U.S. Global Investors is one of 76 monthly dividend stocks. You can download our full list of monthly dividend stocks (along with price-to-earnings ratios, dividend yields, and payout ratios) by clicking on the link below:
U.S. Global Investors’ yield of 3.9% is not particularly attractive from an income perspective, even if it is paid monthly. In addition, we see future growth as highly speculative. And while the dividend is likely safe for now, deteriorating earnings could result in a payout cut or suspension in the future.
This article will analyze the investment prospects of U.S. Global Investors in greater detail.
Business Overview
U.S. Global Investors began more than 50 years ago as an investment club. Today, it is a publicly traded registered investment advisor that seeks to provide investing opportunities in niche markets around the world. The company offers sector-specific exchange-traded funds and mutual funds and is interested in cryptocurrencies. In 2024, U.S. Global Investors produced $11 million in annual revenue and had a market capitalization of just $30.2 million.
The company has a number of niche products in its portfolio of offerings, with the breakdown at roughly two-thirds in gold and natural resources, and the balance in emerging markets, US equity, and fixed income products.
Source: Investor Presentation
Indeed, assets under management have been somewhat volatile but have moved decidedly in the wrong direction in recent years. U.S. Global Investors is not unique among asset managers in seeing volatile AUM, but its very small scale and overall negative trend in AUM is concerning from our perspective.
U.S. Global Investors, Inc. reported Q4 2024 revenues of $2.2M and a net loss of $86K ($0.01 per share). Assets under management (AUM) fell to $1.5B from $2.1B YoY. Shareholder yield hit 10%, more than double the 10-year Treasury yield.
The company launched its fourth ETF, U.S. Global Technology and Aerospace & Defense ETF (NYSE: WAR), on Dec. 30, 2024. This actively managed fund focuses on defense, cybersecurity, and AI, with global AI defense spending projected to grow from $28B in 2025 to $65B by 2034. Global military spending reached $2.4T in 2023, and EU defense budgets hit $342B in 2024.
Gold demand set a record at 4,974 metric tons in 2024, with central banks buying 1,000+ tons for the third year. The company repurchased 807,761 shares (+19% YoY) and maintained a $0.0075 monthly dividend. The company remains financially stable with $38M in working capital and $26M in cash.
Growth Prospects
While certain quarters will show large investment gains for U.S. Global Investors, we see the long-term business model as challenged. Therefore, we do not believe this company’s long-term growth prospects are particularly enticing.
However, this isn’t a new phenomenon, as the company has struggled for years with profitability. The company has investments that produce fairly sizable gains and losses in any particular quarter.
Currently, GROW is having success growing the topline, and we expect this will continue as incremental improvements in its network and brand power are made. With the current portfolio, the company is making large bets on precious metals, crypto, and airline funds.
Additionally, share repurchases could benefit the company and drive earnings-per-share growth. We estimate book value per share will grow at a low single-digit annualized rate in the medium term.
Source: Investor Presentation
Dividend Analysis
U.S. Global Investors has paid its dividend monthly for more than 15 consecutive years, which is a decent track record. At the current payout of $0.09 per share annually, the stock yields 3.5%. However, on a yield basis, U.S. Global Investors is far from attractive, although the company has tripled its dividend since the onset of the pandemic.
One important factor to note as well is that the company is not afraid to cut its dividend. GROW has cut its dividend several times over the past decade. In fact, the annual dividend per share was $0.24 in 2012, which is significantly higher than the current $0.08 per share.
The problem is that with a murky outlook for earnings growth, we believe dividend growth will also be fairly difficult to come by. On the plus side, with a clean balance sheet, we believe it can continue to pay the dividend for some time if it chooses to fund it with cash on hand rather than earnings.
In fact, the company has enough cash and short-term bonds on the balance sheet to theoretically pay the dividend for years without earnings. Thus, we believe the payout is likely safe at this point.
Final Thoughts
U.S. Global Investors has a tough road ahead of it. The company has to compete with other asset managers that are many times its size in an industry where scale means pricing power. This company has no scale or pricing power and is seeing rising operating costs.
Investors should always be mindful of unique liquidity risks and other factors when buying micro-cap stocks that have market caps below $100 million.
Its massive exposure to precious metals and natural resources, along with some other more speculative bets, are potential growth catalysts with immense upside potential but are also risky. Given this and the fact that the dividend track record is so poor, we think income investors should avoid this stock. However, for investors interested in growth, as the name implies, this could be an opportunity to invest in speculative plays such as precious metals, crypto, and airline funds.
Don’t miss the resources below for more monthly dividend stock investing research.
- The Monthly Dividend Stocks List
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