NEWMONT CORP (NYSE:NEM) - A Gold Stock with Growth and Value Appeal

NEWMONT CORP (NYSE:NEM) stands out as a potential candidate for long-term investors seeking growth at a reasonable price (GARP). The company, a major player in gold and metals mining, meets several key criteria from Peter Lynch's investment strategy, combining steady growth, strong profitability, and an attractive valuation.

Why NEM Fits the GARP Approach

• Strong Historical Growth: NEM has delivered an impressive 5-year average EPS growth of 21.58%, well within Lynch's preferred range of 15-30%. This indicates sustainable expansion rather than overheated growth.
• Reasonable Valuation: With a PEG ratio (5Y) of 0.59, the stock is priced attractively relative to its earnings growth—a hallmark of Lynch’s strategy, which favors PEG ratios below 1.
• Healthy Financials: The company maintains a solid balance sheet, with a Debt/Equity ratio of 0.25, well below the screener’s threshold of 0.6. Its Current Ratio of 1.98 also reflects ample liquidity to cover short-term obligations.
• High Profitability: NEM’s Return on Equity (ROE) of 16.22% exceeds the 15% minimum Lynch sought, indicating efficient use of shareholder capital.

Fundamental Strengths and Considerations

NEM’s latest fundamental analysis report highlights additional positives:

• Industry-Leading Margins: The company outperforms most peers in operating and profit margins.
• Valuation Upside: NEM trades at a discount to both industry and S&P 500 averages on metrics like P/E and Price/Free Cash Flow.
• Dividend Reliability: While the yield is modest at 1.83%, NEM has paid dividends for over a decade, though recent declines in earnings raise sustainability questions.

Potential risks include expected near-term declines in EPS and revenue, which investors should weigh against its strong historical performance and low valuation.

For more stocks matching the Peter Lynch strategy, explore our screener results.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.