Newmont (NEM) Set to Repurchase Shares Worth Up to $1 Billion

Newmont Corporation NEM recently announced that its board has approved a share repurchase program for up to $1 billion of common equity. This repurchase will be completed over the next 18 months. It is in addition to Newmont’s industry-leading dividend framework. It will be carried out at the company’s discretion, using open market repurchases in the authorization period.

Newmont follows a capital allocation strategy, wherein it maintains financial strength and flexibility, balances stable reinvestment in the business and provides good returns to shareholders.

The company has a dividend framework, which includes a sustainable base dividend and additional returns at higher gold prices. The repurchase program builds on the $1 billion 2020 program, which retired 22 million shares at the average price of $45 per share.

The company noted that the share repurchase program further underscores its disciplined operating model and a world-class and sustainable portfolio to provide industry leading returns to shareholders. The company has returned more than $2.7 billion to shareholders through dividends and share buybacks since January 2019.

Shares of Newmont have gained 42.3% in the past year compared with 28.6% rise of the industry.

For 2020, Newmont had retained its attributable gold production target of around 6 million ounces. The company continues to expect gold cost applicable to sales to be $760 per ounce and all-in sustaining costs to be $1,015 per ounce.

The company expects capital expenditures for 2020 to be around $1.4 billion. It is progressing with majority of its development and sustaining capital projects — including Tanami Expansion 2 and Subika Underground — as well as advancing laybacks at Boddington and Ahafo.

Newmont Corporation Price and Consensus

 

Newmont Corporation Price and Consensus

Newmont Corporation price-consensus-chart | Newmont Corporation Quote

 

Zacks Rank & Key Picks

Newmont currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited FSUGY, BHP Group BHP and Impala Platinum Holdings Limited IMPUY.

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 141% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 59.5% for the current fiscal. The company’s shares have gained around 25% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 31.8% in the past year. It currently sports a Zacks Rank #1.

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