Gold prices have extended their record-setting run this week, bolstered by heavy buying from global central banks. The precious metal is also benefiting from its safe-haven status against a backdrop of soaring government debt and escalating geopolitical tensions - and with a long-awaited interest rate cut from the Federal Reserve expected in September, the rate-sensitive commodity could be set for more upside.
As gold (GCZ24) grabs the spotlight, Canadian mining company Kinross Gold Corporation (KGC) is having a standout year, with shares skyrocketing nearly 50% in 2024 alone. Despite the impressive rally, analysts forecast double-digit EPS growth, with projections indicating that there is more room for this stock to soar.
With more room for the shares to rise, now could be the time to snap up this dividend-paying gold stock. Let’s take a closer look.
About Kinross Gold Stock
Toronto-based Kinross Gold Corporation (KGC), founded in 1993, is a key player in the gold mining scene. This upstream company acquires, explores, and develops gold properties across the U.S., Brazil, Chile, Canada, and Mauritania. Kinross has some big names in its portfolio, like Eastwest Gold Corporation, Red Back Mining, and Great Bear Resources, which it scooped up in 2022.
Lately, they have been on the move with a new exploration deal in Nevada through Riley Gold. If all goes well, Kinross could grab up to a 75% stake after investing at least $20 million in the project. It is safe to say Kinross is gearing up for some serious growth.
Shares of the gold mining company have surged 89.9% over the past 52 weeks and 49.4% on a YTD basis. That outperforms the VanEck Gold Miners ETF's (GDX) gains over both time frames, as well as the benchmark S&P 500 Index's ($SPX) returns. In fact, on Aug. 19, KGC stock set a new three-year high of $9.58.
Priced at 5.77 times cash flow, Kinross Gold trades at a healthy discount to the sector median.
Plus, KGC currently pays a quarterly dividend of $0.03 per common share. The annualized dividend of $0.12 per share translates to a yield of 1.33%.
Kinross Gold Rides High After Q2 Earnings Beat
Shares of Kinross Gold rose 3.7% on July 31 after the company’s stronger-than-projected Q2 earnings results. Its total revenue rose 11.6% annually to $1.2 billion, beating estimates by 2.2%, while its adjusted EPS held steady at $0.14, edging past the analyst consensus by $0.01.
The firm’s gold production hit 535,338 ounces, with Tasiast, Paracatu, and La Coipa delivering 67% of total production. Kinross also generated an adjusted operating cash flow of $478.1 million, up 4.1% year over year, and a solid $2.1 billion in liquidity, including $480 million in cash. On top of that, it has been trimming down debt, repaying $200 million in term loans.
Looking ahead, Kinross is on course to hit its 2024 goals, estimating production to be around 2.1 million gold equivalent ounces, with a potential variation of 5% above or below this estimate. Similarly, costs are expected to hover around $1,020 per ounce sold, while all-in-sustaining costs are projected to land near $1,360 per oz. sold. Even with inflation and varying production, the company plans to manage capital expenditures at around $1.05 billion in 2024.
Analysts tracking Kinross predict EPS of $0.58 in fiscal 2024, up 31.8% annually, with the bottom line projected to surge another 22.4% to $0.71 in fiscal 2025.
What Do Analysts Expect for KGC Stock?
KGC stock has a consensus “Moderate Buy” rating overall. Among the 14 analysts covering the stock, eight suggest a “Strong Buy,” two advise a “Moderate Buy,” three analysts are playing it safe with a “Hold” rating, and one recommends a “Moderate Sell.”
The mean price target for KGC is $10.24, indicating an upside potential of 13.3% from current levels. The Street-high target price of $11.84 implies the stock could rally as much as 30.9%.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
