Once in a Lifetime Opportunity to Buy Barrick Gold Corporation (USA) (ABX)!

Compelling metrics

In virtually every value metric, Barrick Gold Corporation (USA) (NYSE:ABX) shines when compared with its peers. Barrick’s forward Price-to-Earnings (P/E) ratio is extremely low at 4.9 and is significantly lower than Newmont Mining Corp (NYSE:NEM) (9.3) and Goldcorp Inc. (USA) (NYSE:GG) (12.4). In terms of price-to-book, Barrick comes in at a compelling 0.7 compared with 1.1 for Newmont and 0.9 for Goldcorp. Perhaps one of the best metrics is the dividend yield. Barrick is now paying over 5% which is higher than Newmont and much higher the Goldcorp. So Barrick Gold Corporation (USA) (NYSE:ABX) will pay you to wait for improvement in the Pascua-Lama situation.

Based on the above analysis, I believe the recent decline of Barrick was overdone. Pascua-Lama is important to Barrick’s future, but it is not a make-or-break proposition. Even without Pascua-Lama, Barrick owns over 26 mines that produced over 7 million ounces of gold last year. Barrick also has over 120 million ounces of gold and about a billion ounces of silver in reserves.

Foolish bottom line

When the Pascua-Lama issue is resolved, Barrick should rocket ahead, but until then, the company is one of Wall Street’s most unloved stocks! Thus, based on the old Wall Street adage, it may be time for Foolish investors to back up the truck and load up with this gold stock. If you can handle the volatility, then I believe that long-term investments in Barrick will be well rewarded.

John Dowdee has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Once in a Lifetime Opportunity to Buy Barrick Gold! originally appeared on Fool.com and is written by John Dowdee.

John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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