Newmont Goldcorp Corporation (NEM) is the world’s largest gold mining company. Its main production assets are located in the United States, as well as Australia, Peru, Ghana and Suriname. The company has numerous joint ventures, incl. with Barrick Gold. In January 2019, Newmont and Goldcorp agreed to merge into a player with the production of 6-7 million ounces of gold annually.
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In July 2019, a joint venture was formed with Barrick Gold called Nevada Gold Mines. The facility is located in Nevada and, according to a joint press release from the gold companies, led to the creation of the world’s largest gold company. The Nevada gold mines are 61.5% owned and operated by Barrick and 38.5% owned by Newmont Goldcorp.
Newmont produced 6.29 Moz of gold in 2019 versus 5.1 Moz of gold in 2018. Average realized price was $1399/oz, all-in sustaining costs $1122/oz.
Key financial indicators
The company received record revenue and EBITDA in the last quarter. Newmont’s revenue for the third quarter of 2020 increased by 17% to $3.17 billion thanks to the rise in gold prices to $1,913 per ounce. Newmont produced 1.54 million ounces of gold in the third quarter of 2020, which is 6% less than in the same period last year.
The decline in production is due to the continued impact of COVID-19 on some assets, as well as the sale of the Red Lake and Kalgoorlie projects. In total, Newmont produced 4.28 million ounces of gold in 9 months, down 4% from January-September last year.
Adjusted EBITDA for the quarter increased 1.5 times to $1.66 billion. Adjusted net income reached $697 million for the quarter, an increase of 1.4 times.
On the back of strong financials, Newmont’s dividend reached $0.4 for the quarter versus $0.25 per share a quarter earlier.
Investment attractiveness factors. Amid the ultra-soft monetary policy pursued by the largest central banks in the world, a number of investors are afraid of accelerating inflation, which has led to a galloping investment demand for gold. According to the World Gold Council, investment demand for gold jumped 1.6 times in 9 months of 2020 relative to January-September 2019 and reached 1,630.2 tons.
Cisco Systems, Inc.(CSCO) – A good bet for medium-term investors
Cisco is the world leader in networking equipment. The company manufactures a wide variety of devices in such areas as video communications, switches and data centers, information security, integrated infrastructures (FlexPod, Vblock, VSPEX).
Net income for Cisco in its fiscal fourth quarter ended July 25 was $2.64 billion, or $0.62 per share, up from $2.21 billion, or $0.51 per share, in the same period a year earlier. The company’s revenue was $12.2 billion, up from $13.4 billion in the same period a year earlier.
The company’s results were again better than forecasted, as in every quarter over the past 10 years. Analysts, on average, expected adjusted earnings of $0.74 per share on $12.1 billion in revenue.
Cisco’s long-term growth is expected to remain unchanged over the next few years. There could be major drivers of growth in security, applications and optics, while Covid-19 dampens demand for Cisco products in the campus and data center switch segments.
Cisco Systems has a reasonable dividend payout ratio, and its dividends are well covered by cash flow.