In his latest stock analysis for Money Magazine, Talaria Co-CIO Chad Padowitz takes a look at Newmont, the world’s leading gold company and a producer of copper, silver, zinc and lead.
“Newmont has some of the best margins of any company, currently producing gold at a cost of US$1650 per ounce, versus a current gold price of about US$3400.
A sustained price in the US$3000+, which entrenches NEM as a very high margin business, alongside some more predictable operational outcomes should see the required yield drop.
At 6% this would be around 20% higher than today or put another way the current price assumes 6% yield at $2900 gold price.”
He also outlines how the company has a stable and predictable annualised common dividend and have exercised $2.0 billion of share buybacks to date from a $3.0 billion authorised program.
“They are a leader for the gold sector in sustainability, with demonstrable social and environmental targets,” Chad says.
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