I own this stock of Barrick Gold Corp (TSX-ABX, NYSE-GOLD). This is a big gold mining company that I have followed for years. It was on some dividend growth lists at different times and covered by the Investment Reporter. It is a resource stock, so it is probably not a long term hold.
When I was updating my spreadsheet, I noticed my total return is low at 8.40% with 7.27% from capital gains and 1.13% from dividends for this stock I have had for 8 years. I have not invested much into this stock and I do not expect much. I invested a bit for diversification purposes. I have some 30 years of data on this stock. The revenue peaked in 2012 at $14,547M and it has not yet got back to this peak. Revenue for 2020 was $12,595M. Also, if you look at the charts below you will see that total return has not been very good for long term investors.
The dividend yields are low with dividend growth is recently good. The current dividend yield is low (below 2%) at 1.63%. The 5, 10 and historical dividend yields are also low at 1.01%, 1.27% and 1.07%. The dividends have increased a lot in the past few years after 4 years of dividend declines. The dividends were increase by 55% in 2020. The 5 year dividend growth is 17.23% per year. However, the 10 year growth is negative at 3.4%.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 is 24% with 5 year coverage at 21%. The DPR for CFPS for 2020 is 8% with 5 year coverage at 5%. The DPR for Free Cash Flow for 2020 is 16% with 5 yar coverage at 20%. Sites seem to agree on FCF.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio is currently good at just 0.13. It has varied in the past. The Liquidity Ratio is good at 3.67 and has always been good. The Debt Ratio is also good at 3.14. The Leverage and Debt/Equity Ratios are good at 1.99 and 0.63.
The Total Return per year is shown below for years of 5 to 34 to the end of 2020 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 15.28% | 24.41% | 23.15% | 1.26% |
| 2010 | 10 | -1.05% | -5.09% | -5.87% | 0.78% |
| 2005 | 15 | 2.92% | 0.39% | -0.74% | 1.13% |
| 2000 | 20 | 0.73% | 2.10% | 0.82% | 1.28% |
| 1995 | 25 | 3.58% | 0.13% | -0.86% | 0.99% |
| 1990 | 30 | 7.13% | 4.27% | 2.79% | 1.48% |
| 1986 | 3 | 10.90% | 10.24% | 7.30% | 2.94% |
The Total Return per year is shown below for years of 5 to 34 to the end of 2020 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 17.23% | 26.58% | 25.29% | 1.30% |
| 2010 | 10 | -3.44% | -7.38% | -8.13% | 0.75% |
| 2005 | 15 | 2.31% | -0.11% | -1.34% | 1.23% |
| 2000 | 20 | 1.73% | 3.20% | 1.66% | 1.54% |
| 1995 | 25 | 3.87% | 0.50% | -0.59% | 1.08% |
| 1990 | 30 | 7.06% | 3.93% | 2.49% | 1.44% |
| 1986 | 34 | 10.97% | 10.50% | 7.60% | 2.90% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 11.24, 14.31 and 17.37. The corresponding 10 year ratios are 2.01, 2.42 and 2.83. The corresponding historical ratios are 16.93, 25.34 and 29.62. The current P/E Ratio is 17.09 based on a stock price of $27.65 and EPS estimate for 2021 of $1.62 ($1.29 US$). The 10 year ratios are very low because of 5 years of EPS losses, so I am using the 5 year P/E Ratios. The current P/E Ratio is between the median and high median 5 year P/E Ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a Graham Price of $24.42. The 10 year low, median, and high median Price/Graham Price Ratios are 0.80, 0.99 and 1.33. The current P/GP Ratio is 1.13 based on a stock price of $27.65. The current P/GP Ratio is between the median and high median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 1.85. The current P/B Ratio is 1.68 based on a stock price of $22.06, Book Value of $23,341M and a Book Value per Share of $13.13. The current ratio is 9.29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result using CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 7.74. The current P/CF Ratio is 7.23 based on Cash Flow per Share estimate for 2021 of $3.04 and a stock price of $22.06. The current ratio is 6.5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$, but you will get a similar result using CDN$.
I get an historical median dividend yield of 0.95%. The current dividend yield is 1.63% based on a stock price of $27.65 and dividends of $0.45. The current dividend yield is 72% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
I get a 10 year median dividend yield of 1.26%. The current dividend yield is 1.63% based on a stock price of $27.65 and dividends of $0.45. The current dividend yield is 30% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in CDN$.
The 10 year median Price/Sales (Revenue) Ratio is 2.34. The current P/S Ratio is 3.15 based on Revenue estimate for 2021 of $12,471M, Revenue per Share of $7.01 and a stock price of $22.06. The current ratio is 35% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$, but you will get a similar result using CDN$.
Results of stock price testing is that the stock price is? The dividend yield tests say it is cheap, but this is not confirmed by the P/S Ratio testing which says the stock is expensive. The stock price is probably reasonable. Most of the test support a reasonable stock price.
Is it a good company at a reasonable price? This is a gold company, so you would buy it for diversification. It would also be high risk and not for everyone. I find that having a gold company, I pay for attention to the price of gold.
When I look at analysts’ recommendations, I find recommendations of Strong Buy (11), Buy (9), Hold (3) and Underperform (1). The consensus would be a Strong Buy. The 12 month stock price consensus is $36.65 ($29.22 US$). This implies a total return of 34.20% with 1.63% from dividends and 32.56% from capital gains based on a stock price of $27.65 (22.09 US$).
The last two recommendations on Stock Chase are a Sell and a Buy. Andrew Walker on Motley Fool thinks you should buy this company if you like the long term gold story. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list 3 risks. Trefis Team and Great Speculations are contributors to an interesting Forbes article on this company. A writer on Simply Wall Street analyses the company’s debt and doesn’t think that Barrick’s use of debt is risky. Vladimir Zernov on FXEmpire thinks the price is reasonable when P/E Ratio is less than 15.
Based in Toronto, Barrick Gold is one of the world's largest gold producers, operating mines in North America, South America, Australia, and Africa. Its web site is here Barrick Gold Corp.
The last stock I wrote about was about was Leon's Furniture Ltd (TSX-LNF, OTC-LEFUF) ... learn more. The next stock I will write about will be Pembina Pipelines Corp (TSX-PPL, NYSE-PBA) ... learn more on Wednesday, April 21, 2021 around 5 pm. Today on my other blog I will write about "The 1970s Never Ended".... learn more on Tuesday, April 20, 2021 around 5 pm.
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