Decent Value Stocks. Analyze the stocks with a good fundamental valuation, while still showing decent profitability, health and growth.


BARRICK GOLD CORP

Toronto Stock Exchange / Materials / Metals & Mining

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to ABX. ABX was compared to 820 industry peers in the Metals & Mining industry. While ABX has a great profitability rating, there are some minor concerns on its financial health. ABX may be a bit undervalued, certainly considering the very reasonable score on growth This makes ABX very considerable for value investing!



8

1. Profitability

1.1 Basic Checks

In the past year ABX was profitable.
ABX had a positive operating cash flow in the past year.
ABX had positive earnings in each of the past 5 years.
In the past 5 years ABX always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 3.44%, ABX belongs to the top of the industry, outperforming 89.96% of the companies in the same industry.
With an excellent Return On Equity value of 6.83%, ABX belongs to the best of the industry, outperforming 91.34% of the companies in the same industry.
ABX has a Return On Invested Capital of 5.13%. This is amongst the best in the industry. ABX outperforms 92.97% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ABX is below the industry average of 9.64%.
The 3 year average ROIC (5.09%) for ABX is below the current ROIC(5.13%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.44%
ROE 6.83%
ROIC 5.13%
ROA(3y)2.68%
ROA(5y)4.39%
ROE(3y)5.27%
ROE(5y)8.86%
ROIC(3y)5.09%
ROIC(5y)5.1%

1.3 Margins

ABX's Profit Margin of 13.19% is amongst the best of the industry. ABX outperforms 94.86% of its industry peers.
In the last couple of years the Profit Margin of ABX has declined.
ABX has a better Operating Margin (28.36%) than 95.98% of its industry peers.
ABX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 34.30%, ABX belongs to the top of the industry, outperforming 93.35% of the companies in the same industry.
ABX's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 28.36%
PM (TTM) 13.19%
GM 34.3%
OM growth 3Y-11.5%
OM growth 5Y5.4%
PM growth 3Y-15.43%
PM growth 5YN/A
GM growth 3Y-9.57%
GM growth 5Y1.71%

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5

2. Health

2.1 Basic Checks

ABX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ABX has about the same amount of shares outstanding.
The number of shares outstanding for ABX has been increased compared to 5 years ago.
The debt/assets ratio for ABX has been reduced compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 1.21, we must say that ABX is in the distress zone and has some risk of bankruptcy.
ABX has a Altman-Z score of 1.21. This is comparable to the rest of the industry: ABX outperforms 48.43% of its industry peers.
ABX has a debt to FCF ratio of 4.96. This is a neutral value as ABX would need 4.96 years to pay back of all of its debts.
ABX's Debt to FCF ratio of 4.96 is amongst the best of the industry. ABX outperforms 92.22% of its industry peers.
A Debt/Equity ratio of 0.20 indicates that ABX is not too dependend on debt financing.
ABX's Debt to Equity ratio of 0.20 is on the low side compared to the rest of the industry. ABX is outperformed by 73.02% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.2
Debt/FCF 4.96
Altman-Z 1.21
ROIC/WACC0.52
WACC9.92%

2.3 Liquidity

A Current Ratio of 2.65 indicates that ABX has no problem at all paying its short term obligations.
ABX's Current ratio of 2.65 is in line compared to the rest of the industry. ABX outperforms 56.34% of its industry peers.
A Quick Ratio of 2.06 indicates that ABX has no problem at all paying its short term obligations.
ABX has a Quick ratio (2.06) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 2.65
Quick Ratio 2.06

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4

3. Growth

3.1 Past

ABX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.29%, which is quite impressive.
Measured over the past years, ABX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.47% on average per year.
The Revenue has grown by 11.02% in the past year. This is quite good.
The Revenue has been growing by 9.49% on average over the past years. This is quite good.
EPS 1Y (TTM)54.29%
EPS 3Y-9.94%
EPS 5Y18.47%
EPS Q2Q%25%
Revenue 1Y (TTM)11.02%
Revenue growth 3Y-3.28%
Revenue growth 5Y9.49%
Sales Q2Q%17.68%

3.2 Future

The Earnings Per Share is expected to grow by 6.04% on average over the next years.
Based on estimates for the next years, ABX will show a decrease in Revenue. The Revenue will decrease by -0.71% on average per year.
EPS Next Y50.45%
EPS Next 2Y44.4%
EPS Next 3Y31.65%
EPS Next 5Y6.04%
Revenue Next Year15.57%
Revenue Next 2Y17.35%
Revenue Next 3Y12.23%
Revenue Next 5Y-0.71%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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9

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 15.63, the valuation of ABX can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of ABX indicates a rather cheap valuation: ABX is cheaper than 91.47% of the companies listed in the same industry.
ABX is valuated rather cheaply when we compare the Price/Earnings ratio to 29.48, which is the current average of the S&P500 Index.
ABX is valuated reasonably with a Price/Forward Earnings ratio of 9.65.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ABX indicates a rather cheap valuation: ABX is cheaper than 91.72% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ABX to the average of the S&P500 Index (23.95), we can say ABX is valued rather cheaply.
Industry RankSector Rank
PE 15.63
Fwd PE 9.65

4.2 Price Multiples

ABX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ABX is cheaper than 93.98% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ABX indicates a rather cheap valuation: ABX is cheaper than 93.35% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 31.04
EV/EBITDA 5.48

4.3 Compensation for Growth

ABX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ABX has an outstanding profitability rating, which may justify a higher PE ratio.
ABX's earnings are expected to grow with 31.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.31
PEG (5Y)0.85
EPS Next 2Y44.4%
EPS Next 3Y31.65%

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5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.20%, ABX has a reasonable but not impressive dividend return.
ABX's Dividend Yield is rather good when compared to the industry average which is at 9.77. ABX pays more dividend than 97.11% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.16, ABX has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.2%

5.2 History

The dividend of ABX is nicely growing with an annual growth rate of 30.07%!
ABX has been paying a dividend for at least 10 years, so it has a reliable track record.
ABX has decreased its dividend recently.
Dividend Growth(5Y)30.07%
Div Incr Years0
Div Non Decr Years1

5.3 Sustainability

ABX pays out 43.02% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of ABX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP43.02%
EPS Next 2Y44.4%
EPS Next 3Y31.65%

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