49.39 +0.25 (0.51%)
Pre-Market: 5:35AM EST
|Bid||49.37 x 2900|
|Ask||51.39 x 800|
|Day's Range||49.06 - 51.07|
|52 Week Range||29.77 - 51.34|
|Beta (5Y Monthly)||0.14|
|PE Ratio (TTM)||12.89|
|Forward Dividend & Yield||0.56 (1.11%)|
|Ex-Dividend Date||Mar. 03, 2020|
|1y Target Est||N/A|
Once fully operational, Newmont's (NEM) Boddington mine will become the world's first open-pit gold mine with an autonomous haul truck fleet.
(Bloomberg) -- As gold prices rise, miners have been boosting shareholder payouts in the face of a decline in global output. That’s worrying some investors concerned about the longterm growth prospects of an industry built on a depleting resource.The value of gold, a haven commodity, is driven more by global economics than supply and demand. It’s soaring toward $1,700 an ounce now on fear the coronavirus will harm growth. Any unexpected event -- from a surprising cure for the virus to a positive trade deal -- could drop the value significantly. High prices put more gold scrap on the market, low ones boost hoarding and, if miner output remains static, so should profits.Increasingly, investors are split between their wish for higher dividends in the short run and the need to assure company stability over the long term. Finding the “best of both worlds” in allocating the rising cash pile is key for the future of the industry, according to Josh Wolfson, an analyst at RBC Capital Markets.“Miners in general are exposed to significant external factors that are out of their control,” said Simon Jaeger, a portfolio manager at Flossbach von Storch AG, a top-10 investor in both Newmont Corp. and Barrick Gold Corp. “It’s certainly a reason for not paying too much in dividends,” he said. “You want to have the cash buffer on your balance sheet in order to be financially flexible when prices get worse.”Gold prices are currently at a seven-year high as concerns mount that the coronavirus outbreak in Asia will derail global growth. In a sign that the virus is already starting to dent the world’s largest economy, business activity in the U.S. shrank in February for the first time since 2013.On Monday, spot gold was up 2.3% to $1,680.38 an ounce at 7:25 a.m. in New York.Gold producers are “gushing cash,” said John Hathaway, senior portfolio manager at Sprott Asset Management, in support of the higher dividends. “They are in a position to raise their dividend,” he said. “And there will be boardroom pressure and shareholder pressure to do that.”The industry has been blasted in the past for underspending on production, overspending on acquisitions and piling up debt. Now, though, after years of fat-trimming, miners and their investors are well-positioned to gain from the higher prices. That’s allowed companies including Barrick and Newmont to boost free-cash flow and, to varying degrees, reward shareholders.Earlier this month, though, Mark Bristow, Barrick’s chief executive officer, sent a warning shot across the bow of the industry. Even if all current projects work out, he said, gold supply will still fall 30% globally by 2029. While sinking supply would be bullish for bullion prices, margins and revenues could be hit if companies are forced to mine lower-grade or hard-to-access deposits.The divide between whether to push profits or new production has become more focused this year.Agnico Eagle Mines Ltd. offers a case in point of how closely investors are watching the issue. Despite boosting its dividend 14% and forecasting rising production through 2022, Agnico’s shares were punished after it cut its 2020 output guidance earlier this month. In an interview after the results, CEO Sean Boyd argued that dividend increases are important not just as a way of sharing the benefits of higher gold prices, but also because it demonstrates a company’s ability to maintain capital discipline.Success in the changing shareholder landscape is “going to be from the better gold-mining businesses being able to attract new generalist money,” Boyd said by telephone.‘Endless Pit’Steve Land, portfolio manager for the Franklin Gold and Precious Metals Fund, believes the next step for miners is to show the sector is “not just this endless pit of having to pour more and more money in all the time.” The trend toward higher dividends is a way of rebuilding trust and confidence, according to Land. These companies can also take the time to assess future projects, he said, but should be “in no rush to push things forward.”Newmont, meanwhile, seems to be seeking to meet a “best of both worlds” scenario.In January, Newmont said it planned to hike its dividend by 79% to $1 per share annually, effective in April, while maintaining production for the next five years. On Thursday, Chief Financial Officer Nancy Buese said the U.S.-based miner was considering “other shareholder friendly actions” it might take.One key consideration “will be to determine our appropriate level of dividend on a go-forward and sustainable basis,” she said.Barrick, meanwhile, announced a 40% dividend hike to 7 cents a share earlier this month. As it sells assets and tackles its debt, the Canada-based miner is hoping to attract generalist investors to its stock. But it also lowered its five-year production guidance and is reevaluating its portfolio mix.Generally, it appears the high-dividend strategy is helping lift gold equities. A Bloomberg Intelligence index of senior gold producers lagged the performance of gold futures for most of the past decade. But in the past 12 months, the gold group is killing it, rising 57% compared with 24% for gold.“If a company has genuine productive opportunities to invest capital in their business at high return, that is always going to be preferable versus paying a dividend,” said RBC’s Wolfson by phone. “But companies which can demonstrate overall discipline by allocating capital effectively -- plus paying out cash flow to shareholders -- I think will ultimately accomplish the best of both worlds.”\--With assistance from Maria Elena Vizcaino and Yvonne Yue Li.To contact the reporters on this story: Justina Vasquez in New York at firstname.lastname@example.org;Danielle Bochove in Toronto at email@example.com;Steven Frank in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Reg Gale, Joe RyanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Newmont Corp. climbed after the world’s largest gold miner reported earnings that beat analysts’ expectations, helped by a tailwind from higher bullion prices.Miners have been sharing the windfall from stronger prices with investors in the form of higher dividends. Newmont led the pack in January with its promise of a 79% hike to $1 per share annually. The increase will take effect later in the year.Newmont is considering “other shareholder friendly actions” it might take in the future, Chief Financial Officer Nancy Buese said Thursday on the fourth-quarter earnings call. A key such action “will be to determine our appropriate level of dividend on a go forward and sustainable basis,” she said.Newmont rose as much as 6.1%, the most intraday in almost a year, while an index of senior gold miners gained as much as 1.1%. Newmont was trading up 4.2% as of 10:58 a.m. in New York, increasing its gains in the past 12 months to 36%.Adjusted fourth-quarter earnings were 50 cents a share on revenue of $2.97 billion, the Greenwood Village, Colorado-based miner said in its earnings statement. That beat analysts’ estimates for 46 cents and sales of $2.93 billion.The company’s production and cost guidance over the next five years was unchanged, solidifying its lead over rival Barrick Gold Corp.Spot gold averaged about $1,483 an ounce in the fourth quarter, 21% more than a year earlier. The metal has extended gains this year to trade above $1,600 as the coronavirus weighs on expectations for economic growth, fueling investor demand for haven assets.The rise in gold prices helped mitigate higher cost of sales at the assets it acquired through its $10 billion merger with Goldcorp Inc. last year.(An earlier version corrected revenue and the revenue estimate in sixth paragraph)To contact the reporter on this story: Danielle Bochove in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Steven Frank, Reg GaleFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Newmont (NEM) delivered earnings and revenue surprises of 4.17% and -4.46%, respectively, for the quarter ended December 2019. Do the numbers hold clues to what lies ahead for the stock?
Newmont (NEM) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Q1 2020 is the time to take a deeper look at 5 of my top picks: Cargojet Inc. (TSX:CJT), Bank of Montreal (TSX:BMO)(NYSE:BMO), Killam Apartment Real Estate Investment Trust (TSX:KMP.UN), Newmont Corporation (TSX:NGT), and Pembina Pipeline Corporation (TSX:PPL)(NYSE:PBA).
Lundin Mining Corp. (TSX:LUN) is a strong play for a mix of capital gains and passive income, as well as high growth potential.
(Bloomberg Opinion) -- Peak gold production is looking a little more distant. Global supply of the yellow metal has been inexorably approaching its high-water mark, as ore is extracted faster than new discoveries are made. Mines have been aging fast. A sustained price rally can change that picture, as investors rekindle their enthusiasm for large-scale exploration and technological innovation. Bullion miners’ margins will benefit.Gold is coming out of a long period in the investor wilderness. Last year marked the biggest annual gain in prices since 2010. It broke through $1,570 last week — the highest in almost seven years. Gold prices are driven by factors that aren’t always predictable, but there’s certainly scope to go higher, with interest rates low and geopolitical tensions simmering. Holdings of gold in exchange-traded funds, popular with retail investors, are near 2012’s lofty levels. Central banks remain buyers too.This isn’t a repeat of 2011, when gold cracked a gravity-defying $1,900 per ounce — at least, not yet. The all-time high remains some way off, despite a handful of analysts already pointing to $2,000 gold. But the impact of higher prices is already trickling down. All-in sustaining cash costs remained at around $934 per ounce for the largest producers in the third quarter of 2019, according to Bloomberg estimates. The industry measure, though rising, makes for healthy margins. Barrick Gold Corp., for example, reported third-quarter free cash flow of $502 million, compared to $55 million in the previous three months.Last year’s flurry of M&A speaks to that exuberance: from Barrick Gold’s merger with Randgold Resources Ltd., completed that January, to Goldcorp Inc.’s union with Newmont Corp., plus a string of opportunistic offers among smaller companies, and imaginative deals like Barrick’s Nevada joint venture with Newmont. Overall, 2019 marked a return to levels last seen during the boom.There’s more to come, especially among smaller players. Diverging levels of bullishness, after years of homogenous forecasts, will create opportunities for miners to expand portfolios.But the deal spike tells a supply story too, and those numbers are grim even after miners pair up, with reserves down steadily for much of the past decade. The average life of a gold mine shrank to 11 years by 2018 from 16 in 2012, according to consulting company Wood Mackenzie Ltd. Back in 2015, as prices fell toward $1,000 an ounce, the World Gold Council warned that the industry was nearing “peak gold,” after which output would begin to decline. That’s still a threat.Tie-ups are no panacea. The trouble is there’s no short-term link between gold prices and supply. Sure, marginal projects become viable, but that’s a transient boost. Also, the lag effect means mines commissioned in boom years will still take years to come into production. Meanwhile, the scars of the 2011 excesses will make miners reluctant to change their assumptions for the long-term gold price, which are largely still at or below $1,300.The good news is that this works both ways. Higher supply, through exploration or innovation, also won’t depress prices.That should increase enthusiasm for exploration. Budgets have shrunk and success rates have been decreasing, even if gold continues to command the lion’s share of the mining sector’s exploration outlays. So far, spending has increased largely on existing projects rather than new finds. Splashy budgets don’t guarantee success, but the supply numbers will have to rise. There are already signs of long-awaited projects accelerating, such as Polyus PJSC’s Sukhoi Log in Siberia. Then there is investment in technology. This isn’t only to automate and electrify fleets, but to upgrade exploration and processing techniques. For gold, processing improvements could make even complex, refractory ore — resistant to more common extraction methods — attractive. Barclays Plc estimated in December that innovation could add 10% of incremental supply growth through 2025. Cost per ounce may come down 4%. That’s a target worth aiming for. To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Reduced federal fund rates and wise decision-making of mining companies make gold stocks like Newmont Goldcorp a worthy buy for this year.
The recent scare out of Iran is just another reminder why all investors should have some exposure to gold, such as an investment in the industry leader Newmont Corporation (TSX:NGT)(NYSE:NEM).
Newmont's (NEM) latest quarterly dividend hike is effective upon the approval and declaration of its first-quarter dividend in April 2020.
VANCOUVER — Newmont Corp. is boosting its quarterly dividend by 79 per cent while also dropping reference to Canadian company Goldcorp as part of a centenary-year rebranding.The Denver-based company says the dividend will increase to 25 cents per share.It was only in April last year that Newmont changed its name to Newmont Goldcorp Corp. after it closed a takeover of the Vancouver-based company in a US$10 billion all-stock deal.Newmont says its name is well recognized after almost a 100 years in operation, and that the update represents a natural step for the transformed company.Along with the name change in last year's deal, Newmont committed to making Goldcorp's Vancouver office its North American regional office, maintaining a significant Canadian presence on Newmont's board of directors, and listing on the Toronto Stock Exchange.In November, Newmont announced it would sell the Red Lake mining complex in Ontario that gave Goldcorp its start in the early 1990s, and helped it grow to become one of the world's biggest gold miners. The deal for Red Lake, valued at up to US$475 million, was part of a streamlining of Newmont's portfolio after the takeover.This report by The Canadian Press was first published Jan. 6, 2020.Companies in this story: (TSX:NGT)The Canadian Press
The gold mining sector has seen a major rally begin over the past couple weeks, but one major company that's been lagging behind is Newmont Goldcorp Corp (TSX:NGT)(NYSE:NEM).
Healthy growth prospects, disciplined capital allocation strategy and synergies from the merger with Goldcorp are driving Newmont Goldcorp's (NEM) shares.
We suggest five gold mining stocks that outperformed the S&P 500 so far this year and are poised well to outperform in the next, backed by upbeat growth estimates and solid Zacks Rank.