AEM's Solid Cash Flow Driving Investor Returns: Can It Deliver More?

Agnico Eagle Mines Limited AEM is capitalizing on robust free cash flow to aggressively enhance shareholder value through dividends and share repurchases. In 2024, the company generated a record operating cash flow of roughly $1.1 billion and solid free cash flow of $570 million, and returned about 43% of free cash flow to shareholders via dividends and share repurchases. Last year, it returned nearly $1 billion to its shareholders. 

In the first quarter of 2025, AEM delivered a robust free cash flow of $594 million and returned around 42% of that through dividends and buybacks. The company, on its first-quarter call, said that it sees potential to further increase shareholder returns and be more active on the share buyback front, considering the strong gold price environment and solid cash generation.

AEM is executing a well-defined capital allocation policy using its substantial cash generation to drive shareholder value, fund a strong pipeline of growth projects, and pay down debt. With gold prices holding firm and cost discipline intact, AEM remains well-placed to continue this shareholder-focused strategy. 

Among its peers, Barrick Mining Corporation B has a solid liquidity position and generates healthy cash flows, positioning it well to take advantage of attractive development and exploration opportunities and drive shareholder value. Barrick returned $1.2 billion to its shareholders in 2024 through dividends and repurchases. Barrick’s board, in February 2025, authorized a new program for the repurchase of up to $1 billion of its outstanding common shares. It repurchased shares worth $143 million under this program during the first quarter.

Newmont Corporation NEM has already delivered $1 billion to its shareholders through dividends and share repurchases since the beginning of 2025. Newmont generated a record free cash flow of $1.2 billion in the first quarter, reflecting strong financial health supporting growth initiatives and shareholder returns. Newmont is well-placed to strengthen its balance sheet and continue returning capital to its shareholders following the completion of its divestment program.

The Zacks Rundown for AEM

Agnico Eagle’s shares have rallied 64.5% year to date against the Zacks Mining – Gold industry’s rise of 54.2%, driven by the record-setting upside in gold prices.

From a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 19.02, a roughly 52.6% premium to the industry average of 12.46X. It carries a Value Score of C.

The Zacks Consensus Estimate for AEM’s 2025 and 2026 earnings implies a year-over-year rise of 55.3% and 5.3%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

AEM stock currently sports a Zacks Rank #1 (Strong Buy). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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