Bull of the Day: Newmont (NEM)

Colorado-based Newmont NEM 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.

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.

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.

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.

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 is currently a Zack Rank #1 (Strong Buy). 

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

Zacks Investment Research