The market outlook for gold mining corporations look very attractive for 2012. However, it is pertinent that one selects the right company having fairly descent valuations as well as strong future prospects of growth. The following are the companies within the gold mining industry which can be purchased at their current market price with a medium to long-term perspective.
New Gold (NGD) is one of the prominent global gold producer having its assets situated in the regions of Canada, Brazil, Australia, Chile, Alaska, and Mexico. The current market price of the company is around $12, within its 52-week trading range of $8.69 and $14.15. The company's market capitalization is around $5.46 billion, whereas its price earnings is around $23.90. The company shows an substantial increase of around 25 million in its outstanding shares, as compared to its outstanding shares of 1.3 million held at the end of third quarter of 2011.
The company currently trades at a premium of around 15 times its forward price earnings, with a price to book ratio of around 2.1. Its peers in the mining miscellaneous group, trade at an approximate average of 12 times their forward price earnings, whereas their price to book ratio are around 3. New Gold is poised to experience an growth in its earnings in 2012, whereby its projected annual earnings growth rate is estimated to be around 40%. The trailing twelve months net income of New gold is around $247 million, which is significantly higher than the trailing twelve months net income of around $59 million, as quoted by its direct competitor Taseko Mines. The company's five-year expected price earnings to growth ratio is around 5, as compared to the industry five-year projected price earnings to growth of around 1.50.
The company has further expanded its operations through its acquisition of Silver Quest Resources Ltd. and Geo Minerals Ltd. in the last quarter of 2011.
Goldcorp (GC) is one of the large gold producers having their primary businesses operating in the Americas. The current market price of the company is around $49, trading within its 52-week range of $41.91 and $56.31. With an earnings per share of around $2.18, Goldcorp has price earnings of around $22. The market capitalization of the company is around $39 billion.
The projected production of gold by the company is expected to increase by around 70%, to an approximation of 4.2 million ounces. Moreover, the company has recently taken measures to generate its future gold production performance by investing in a copper project as well as in Al Morro gold of Northern Chile. An average production of around 21,000 ounces of gold and 200 million pounds of copper, during its 17 year life span, is estimated by the management of Goldcorp. In comparison to its peers, the company's stock currently trades at a premium. The company's trailing twelve months operating margin is around 45%, as compared to 34% and approximately 41% operating margins of its competitors, namely Taseko Mines and Freeport-McMoRan Copper & Gold respectively. The company has strong foothold in its North American business territory, primarily because of its Glamis deal.
Freeport-McMoRan (FCX) is one of the prominent gold, copper and molybdenum production companies, positioned on a global platform. The company's stock is currently trading at around $44, within its 52-weeks trading range of $28.85 and $58.75. The market capitalization of the company is around $42 billion, whereas its earnings per share and price earnings is around $4.78 and $9 respectively. The company shows a strong dividend yield of 1.50, with an average dividend payout of around $1.50 per share. The company's global reserves are valued at around $522 billion.
Considering the operating margin and profit margin of Freeport-McMoRan, which stand at around 43% and 22% respectively, the current market price of the company seems to be grossly undervalued. The company currently trades at around 9.4 times and 8.1 times, of its past and forward earnings, which is much lower than its peers, namely Newmont and Goldcorp which trade in the multiples of around 12 and 20 times respectively, of their past earnings.
The company's current price is relatively cheaper than that of its contemporaries. The company issues special dividends, and also engages in share repurchasing program, through which the company renders liquidity to its investors.
AngloGold Ashanti Limited (AU) is a global mining company diversified across all the four continents. The current market price of the company is around $43, within its 52-week trading range of $38.97 and $51.69. With earnings per share of around $3, and price earnings of around $15, the company's market capitalization is around $16 billion. The company's price earnings is strong as compared to the industry average of around 21, whereby the company generates an return on equity and return on investment of around 30% and 15% respectively.
The company's forecast for 2012 is positive, wherein its 2011 Q4 earnings have strengthened the expectations even further. With an beta of below 1, the company depicts lesser volatility then its peers, which makes it a safe investment. The company trades in the multiples of 8 times its forward price earnings, compared to its peer average of 11.6 in the gold mining group. Similarly, the company trades 18 times its price to book, as compared to the average of around 3.6 for its peer group. The company's projected earnings are said to increase to around $5 in 2012, from around $4 in 2011.
Barrick Gold (ABX) is one of the largest gold producing companies positioned on a global platform. The current market price of its stock is around $49, trading within its 52-week range of $42.50 and $55.95. The market capitalization of the company is around $48 billion, whereas its earnings per share and price earnings are around $4 and $11 respectively. The company shows a dividend yield of around $1.2, with an average dividend payout of around $0.60 per share.
The company's 2012 prospects look very promising with its Pascua-Lama and Pueblo Viejo projects to start production before year end. In fact, the Pueblo Viejo mine is the largest gold reserve in the Dominican Republic, with around 24 million ounces of gold contained in it. The company has one of the stable financial standing in the gold industry. The company's trailing twelve month operating margin is around 48%, as against approximately 30% and $40% shown by its competitors such as AngloGold Ashanti and Newmont respectively.
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