NEWMONT CORP (NYSE:NEM) – A Gold Stock With Attractive Valuation and Strong Fundamentals

NEWMONT CORP (NYSE:NEM) stands out as a potential value opportunity in the metals and mining sector. The company’s fundamentals suggest it is undervalued while maintaining solid profitability, financial health, and growth prospects.

Valuation

NEM’s valuation metrics indicate it is trading at a discount compared to industry peers and the broader market:

• P/E Ratio: At 12.15, NEM is cheaper than 89.6% of its industry peers (average P/E of 31.99).
• Forward P/E: 11.61, below the industry average of 30.23 and the S&P 500’s 20.94.
• Enterprise Value/EBITDA: More affordable than 83% of competitors.
• Price/Free Cash Flow: Better than 88% of the sector.

These metrics suggest the stock is priced attractively relative to its earnings and cash flow potential.

Profitability

NEM scores well in profitability, with strong margins and returns:

• Profit Margin: 25.77%, outperforming 92.9% of industry peers.
• Operating Margin: 35.28%, above 91.6% of competitors.
• Return on Equity (ROE): 16.22%, ranking in the top 11% of the sector.
• Return on Invested Capital (ROIC): 9.63%, improving from a three-year average of 4.19%.

These figures highlight efficient operations and strong earnings generation.

Financial Health

The company maintains a stable balance sheet:

• Debt/Equity Ratio: 0.25, indicating low reliance on debt financing.
• Current Ratio: 1.98, showing sufficient liquidity to cover short-term obligations.
• Debt-to-Free Cash Flow: 1.78, meaning debt could be repaid in under two years using FCF.

While the Altman-Z score (2.28) suggests some caution, overall financial health remains sound.

Growth

Recent performance shows strong momentum:

• EPS Growth (Past Year): +140.23%.
• Revenue Growth (Past Year): +49.51%.
• 5-Year EPS Growth Rate: 21.58%.

Future growth estimates are more modest, with EPS expected to grow at 3.54% annually, while revenue may decline slightly (-5.25%).

Conclusion

NEWMONT CORP presents a compelling case for value investors, combining reasonable valuation with strong profitability and manageable financial risks. While future growth may slow, current fundamentals suggest the stock is undervalued relative to its earnings power.

For more undervalued stocks with solid fundamentals, check our Decent Value Stocks screener.
Review the full fundamental analysis of NEM for deeper insights.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.