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Analysis of Barrick Gold (#GOLD)

Analysis of Barrick Gold (#GOLD)

2 June 2021

Barrick Gold is a Canadian mining company, one of the world’s leading gold producers. According to the results of 2020, the company ranked second in terms of the amount of gold produced in the world. At the moment, the company’s assets are located on almost all continents, which allows us to diversify geographical risks.

The company’s main competitors at the moment are Newmont Goldcorp, Kinross Gold, Polyus and other gold mining companies.

Revenue for the last quarter: $3.0 B (+9% compared to the same period of the previous year)

Operating profit for the last quarter: $1.1 B (+49% compared to the same period of the previous year)

Net income for the latest quarter: $538M (+35% year-over-year)

Earnings per share for the latest quarter: $0.29, up from $0.27 forecast

The company significantly improved its financial performance due to the increase in the price of gold

Geographical distribution of revenue:

United States – 50.00%

Dominican Republic – 12.81%

Tanzania – 9.64%

Mali – 9.59%

Zambia – 5.53%

Côte d’Ivoire – 4.03%

Canada – 3.23%

Argentina – 2.64%

Peru – 1.41%

Papua New-Guinea – 1.11%

The company’s business model is very simple and understandable for investors. Barrick Gold pays dividends to its shareholders. However, the forward dividend yield on the company’s shares remains low-1.5%. Moreover, many analysts note the geographical risks associated with the company’s business. After all, about half of the assets of #GOLD are located in developing countries with a tense political situation.

Thus, Barrick Gold is a mature company with a clear business model. The recent rise in gold prices has helped the company to significantly improve its financial performance. Taking into account the fact that historically gold consumption is growing, #GOLD shares can be an excellent long-term investment.

Barrick, like gold, looks good. While gold is correcting to 1850, Barrick is likely to be in the 22-25 range, maybe just below 20-25, then the rise to the previous 30 will continue.

2 June 2021
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