3. Newmont Corporation (NYSE:NEM)
Overall Score: 3.5
Reddit Score: 3
Robinhood Score: 4
Number of Hedge Fund Holders: 55
Newmont Corporation engages in exploration and production of gold, along with copper, silver, zinc, and lead, with its operations based in North America, South America, Australia, and several other regions. Newmont Corporation (NYSE:NEM) is one of the top mining companies in the world by revenue, despite its below-par relative performance in the last few years to its peers – it has been seen lagging behind not only its peers but also gold prices. As a result, it has been unable to perform according to its guidance.
However, in Q1 2024, the company was able to realize a gold price of $2,090, up by 9.7% from a year ago. The company recorded an adjusted EPS of $0.55 per share, which was an increase from $0.4 recorded a year earlier. Increased production of 1.7 million ounces in the quarter as compared to 1.3 million ounces in the same period a year ago, along with consistently rising gold prices helped Newmont Corporation (NYSE:NEM) bag an adjusted net income of $630 million in the quarter, up by 97% form the quarter a year ago.
Amidst the rising gold prices, analysts at Reddit seemed to be putting a lot of faith in the stock, mainly due to the reputation of the company. Post acquisition of Newcrest last year, the consolidated mineral reserves amounted to 128 million ounces, which were up 40% to the prior year. This reserve size of Newmont is almost equivalent to Barrick Gold and Agnico Eagle reserves combined! Thus, this reputation of the company having the largest mineral reserves will serve the investors well in the long run, as it promises company’s strength and growth in the long term.
In addition to this, the new Goldrush mine, in which Newmont has a 38.5% ownership, is also going operational, with its 2024 ramp up production to be around 130,000 ounces in 2024, further expected to reach 400,000 ounces production level by 2028.
With an annual dividend of $1 per share, offering a yield of 2.27%, the stock is also one of the best gold dividend stocks to buy. Accordingly, the company paid out a dividend of $0.25 in the first quarter of 2024. The generation of cash worth $1.4 billion in the quarter, thanks to improved operational cashflows because of higher realized gold prices, further speaks about strong cash position of the company, demonstrating the company’s growth prospects in the future.
As a result, the stock price has experienced a 15.3% increase in the last one month, and analysts have set a target price of $49.85, as compared to its current price of $44.13, which translates into the stock’s upside of 12.96%, which is realizable given the company is on track to achieve its full year production guidance post its Newcrest acquisition. As such, there is seen an increase of 8 hedge fund holders taking up a stake in the stock over the last quarter, taking the invested value to a whopping $925 million, as of Q1 2024.
