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Bull of the Day: Newmont (NEM)

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Colorado-based Newmont (NEM - Free Report) is one of the world's largest producers of gold, owning several active mines in Nevada, Peru, Australia, and Ghana.

The stock sports the highly coveted Zacks Rank #1 (Strong Buy), with EPS expectations moving higher across the board over recent months.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition to a favorable EPS outlook, the stock resides in the Zacks Mining – Gold industry, which is currently ranked among the top 7% of all Zacks industries. Let’s take a closer look at the company.

NEM Benefits from Gold Surge

The surge in gold prices has been a driving factor behind the stock’s strong YTD performance, up more than 40%. The favorable environment has been reflected by recent quarterly results, with the company crushing our consensus sales and EPS expectations in the most recent release.

Zacks Investment Research
Image Source: Zacks Investment Research

Importantly, the average gold price per oz reached $2,944 throughout the above-mentioned period, melting higher from the $2,090 mark in the same period last year. Free cash flow of $1.2 billion throughout the period also reflected a Q1 record, adding to the positivity.

Below is a chart illustrating NEM’s free cash flow on a quarterly basis. The amplified cash-generating abilities are a huge positive, allowing the company to shell out dividend payments or pay down debt.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares could be of interest to those with an appetite for income as well, currently yielding 1.9% annually compared to a 1.3% yield from the S&P 500. NEM has already delivered $1.0 billion in total returns to shareholders through share repurchases and dividend payments since the start of the year.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Newmont (NEM - Free Report) is currently a Zack Rank #1 (Strong Buy). 


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