Yahoo Finance Gold Investors: Is it Time to Own Barrick Gold Corp.?
Gold is picking up some momentum, and investors are wondering which stocks might be attractive right now.
Let?s take a look at Barrick Gold Corp. (TSX:ABX)(NYSE:ABX) to see if it deserves to be in your portfolio.
Solid numbers
Barrick just reported strong 2016 results.
The company generated adjusted net earnings of US$818 million, or US$0.70 per share for the year. Operating cash flow was US$2.64 billion, and Barrick churned out US$1.51 billion in free cash flow.
Gold production came in at 5.52 million ounces, near the top of guidance, at all-in sustaining costs (AISC) of US$730 per ounce.
Barrick has made good progress on its turnaround efforts and reduced its debt load by an additional US$2 billion in 2016. That?s after a US$3 billion reduction the previous year.
Looking forward, the good news is set to continue.
Barrick plans to lower debt by an additional US$2.9 billion by the end of 2018 with half of the payments targeted for 2017.
Production guidance for this year is 5.6-5.9 million ounces of gold at AISC of US$720-770 per ounce.
Improved free cash flow is starting to head back into the hands of investors. Barrick just raise the quarterly dividend by 50% to $0.03 per share.
Gold market
Gold has picked up a tailwind since mid-December, and while the market could easily reverse course, there are a few reasons investors are feeling bullish.
President Trump?s aggressiveness towards key trading partners is nudging some money into safe-haven assets.
At the same time, investors are keeping a close eye on developments in Europe.
Why?
The Brexit might turn out to be a bit uglier than expected, Italy?s banks are a mess, and France could be on the verge of electing a president who wants to drop the euro and hold a referendum on E.U. membership.
Could gold fall?
The U.S. Federal Reserve intends to raise interest rates three times in 2017. This should provide a headwind for the gold market and could overpower any safe-haven demand triggered by geo-political events.
Should you buy Barrick?
Barrick is now a low-cost producer with industry-leading output and a much healthier balance sheet. The business is generating ample free cash flow at current gold prices and is positioned to benefit from any upward trend in the market.
I wouldn?t back up the truck given the recent gains and the Fed headwinds, but if you are a long-term gold bull, Barrick should probably be on your buy list.
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More reading
Why Barrick Gold Corp. Is a Better Long-Term Play Than Goldcorp Inc.
Barrick Gold Corp.: The Glitter in its Gold Is Shining Brighter
Billionaire Soros Dumps Barrick Gold Corp.: Good Move or Big Mistake?
Fool contributor Andrew Walker owns shares of Barrick Gold.
Two New Stock Picks Every Month!
Not to alarm you, but you're about to miss a very important event! Chief Investment Adviser Iain Butler and his team at Stock Advisor Canada are about to reveal their latest official stock recommendation. The premium "buy alert" will be unveiled to members and you can be among the first to act on the tip.
Don't let this opportunity pass you by - this is your chance to get in early!
Click here to find out how you can get instant access!
Fool contributor Andrew Walker owns shares of Barrick Gold.
