The world’s biggest gold miner, Newmont Corp., presents a unique value proposition in the current market environment, offering both defensive qualities and growth potential. The company’s impressive cash generation capabilities make it an attractive option for long-term investors.
Furthermore, the strategic divestiture of non-core assets has strengthened its balance sheet and delivered significant financial flexibility to pursue high-return development projects and potentially increase shareholder returns.
The company’s unrivaled portfolio of Tier 1 gold and copper assets positions it to benefit from continued strength in precious metals prices. With gold prices trending higher amid global economic uncertainty and expectations of further monetary easing, the firm stands to generate exceptional cash flow in the coming quarters.
Meanwhile, the stock trades at a modest 13.2 times the company’s forward earnings forecast.
NEWMONT CORP. (New York symbol NEM; www.newmont.com) remains a buy for long-term growth and as a hedge against inflation.
The company is the world’s largest gold miner, with major mines in North America, South America, Australia, and Africa. In addition to gold, it also produces copper, silver, lead and zinc.
Newmont reports that in 2024, gold accounted for 84% of its revenue, followed by copper (7%), silver (4%), zinc (3%) and lead (2%). It also gets about 90% of its production from politically stable countries, which cuts your risk.
Newmont continues to make progress with its plan to sell six of its less-important mines. After these sales, it will focus on its 10 top-tier mines in North America, South America, Australia, Papua New Guinea and Ghana.
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Under that plan, Newmont has agreed to sell its Cripple Creek & Victor mine in Colorado to SSR Mining Inc. (Toronto symbol SSRM). The company will receive $100 million when it completes the sale. It could also receive an additional $175 million in future cash payments.
So far, Newmont has agreed to sell $4.3 billion worth of assets. Those proceeds will help fund the company’s plan to buy back $3 billion worth of its shares through October 2026.
Newmont’s outlook remains strong for gold prices—and Newmont
In the three months ended December 31, 2024, Newmont’s revenue jumped 42.8%, to $5.65 billion from $3.96 billion. Excluding one-time items, the company’s per-share earnings more than doubled, to $1.40 from $0.46. The gains were due to higher production, as well as higher gold prices.
Given rising gold prices and production, earnings should rise in 2025 to $3.72 a share; Newmont trades at a low 13.2 times that forecast. The $1.00 dividend yields 2.0%.
Recommendation in Canadian Wealth Advisor: Newmont Corp. remains a buy for your long-term growth and as a hedge against inflation.
