Kinross Gold Corporation (USA) (KGC), Goldcorp Inc. (USA) (GG): Is Newmont Mining Corp (NEM) Destined for Greatness?

Page 1 of 2

Newmont Mining Corp (NYSE:NEM)Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Newmont Mining Corp (NYSE:NEM) fit the bill? Let’s take a look at what its recent results tell us about its potential for future gains.

What we’re looking for
The graphs you’re about to see tell Newmont Mining Corp (NYSE:NEM)’s story, and we’ll be grading the quality of that story in several ways:

Growth: Are profits, margins, and free cash flow all increasing?

Valuation: Is share price growing in line with earnings per share?

Opportunities: Is return on equity increasing while debt to equity declines?

Dividends: Are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let’s take a look at Newmont Mining Corp (NYSE:NEM)’s key statistics:

NEM Total Return Price Chart

NEM Total Return Price data by YCharts

Passing Criteria 3-Year* Change Grade
Revenue growth > 30% 1.8% Fail
Improving profit margin (134.8%) Fail
Free cash flow growth > Net income growth (130.2%) vs. (135.4%) Pass
Improving EPS (135%) Fail
Stock growth (+ 15%) < EPS growth (47.7%) vs. (135%) Fail

Source: YCharts. * Period begins at end of Q2 2010.

NEM Return on Equity Chart

NEM Return on Equity data by YCharts

Passing Criteria 3-Year* Change Grade
Improving return on equity (129.5%) Fail
Declining debt to equity 51.9% Fail
Dividend growth > 25% 133.3% Pass
Free cash flow payout ratio < 50% Negative FCF Fail

Source: YCharts. * Period begins at end of Q2 2010.

How we got here and where we’re going
Things look extremely bad for Newmont Mining Corp (NYSE:NEM) today. This gold miner earns only two out of nine possible passing grades — and with one awarded on a technicality, and the other backed by negative free cash flow, neither of those passes seem particularly defensible. In theory, things can’t get much worse, but reality can be harsh. Is there any hope left for Newmont Mining Corp (NYSE:NEM)?

Fear of falling gold prices is currently plaguing miners across the world. As a result, many gold miners now anticipate severe risk for their upcoming projects. Fool contributor Sean Williams notes that Newmont Mining Corp (NYSE:NEM), one of the world’s largest gold miners, has already written down $1.61 billion on its Hope Bay mine in Canada, and it’s expected that more writedowns are in the offing as long as gold prices continue to drop while superfluous expenses build.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!