Newmont Goldcorp Corporation NEM has recently announced that its board of directors has approved the authorization of a stock repurchase program for up to $1 billion of its common shares. The repurchase is scheduled to be completed in the next 12 months.
The company’s latest move is in line with its disciplined capital allocation priorities, which includes investing in profitable growth, returning cash to shareholders and maintenance of investment grade credit profile. Moreover, the repurchased shares will be retired. This will lead to immediate accretion to shareholders by lowering total outstanding shares and boosting financial performance.
Notably, the company has completed its integration process with Goldcorp. It is now positioned to realize more than $500 million per year in total cash flow improvements by 2021 from supply chain efficiencies, G&A and exploration synergies along with full potential productivity and cost improvements.
The stock repurchase program will be executed at the company’s discretion. The company is likely to utilize the open market repurchases throughout the authorization period.
Newmont Goldcorp’s shares have gained 16.6% in the past year compared with 48.9% surge of the industry.
In November, the company revised its outlook for 2019. It now expects attributable gold production for 2019 to be 6.3 million ounces, down from 6.5 million ounces projected earlier.
For 2019, all-in sustaining costs for gold are projected to be $965 per ounce, down from the previous expectation of $975. Costs applicable to sales expectation for gold are $715 per ounce compared with $735 expected earlier.
Zacks Rank & Key Picks
Newmont Goldcorp currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd KL, Impala Platinum Holdings Ltd IMPUY and Polymetal International plc AUCOY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirkland Lake Gold has an expected earnings growth rate of 97.1% for the current year. The company’s shares have surged 90.7% in the past year.
Impala Platinum Holdings has projected earnings growth rate of 255.2% for 2019. The company’s shares have skyrocketed 247.9% in a year.
Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have appreciated 55.7% in the past year.
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