Is Newmont Corp. a Good Investment?

PHOTO CREDIT: Newmont Corporation

OVERVIEW

Newmont Corporation is a company based in the United States which specializes in the mining and distribution of metals around the world. The company mines metals like gold, silver, copper, lead, and zinc. The company has mines around the world in countries like Indonesia, the United States, Canada, Peru, and many others. The company was founded in 1916.

Why You Should?

1. Newmont Corporation is a good hedge in the stock market. Investors like to put money in gold stocks like Newmont during times of economic recession due to the stable performance and stock price of Newmont. This is a good way to hedge your portfolio before an economic recession/depression happens.
2. Newmont has seen rising revenues and profits due to high gold prices. This has helped the stock see strong numbers during the COVID-19 Pandemic and other economic recessions. Historically, high gold and other metal prices have driven the stock higher, something which is currently occurring. This will benefit the company as well as its investors.
3. Newmont Corporation operates a wide range of land and mines around the world. Some of the countries that they operate in are the United States, Canada, Peru, Ghana, Argentina, and many others. They operate over 68,300 square kilometers and have over 100.2 million ounces in probable gold reserves. These operating numbers will benefit the company and its investors.
4. Newmont will see rising sales of other metals like copper, lead, and zinc as a strong economy is returning. Once people start to go back out again and as the industrial economy starts to demand more raw materials to build products, the company will see higher sales and better financial results. This will benefit both the company and its investors.
5. The company has seen rising revenues and financial results over the past couple of financial years due to the reasons mentioned before. This will help the company build a stronger balance sheet and will help it grow in the future This will benefit both the company and its investors. In the financial year of 2019, the company reported revenues of around 9.74 billion and profits of around 2.8 billion. Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 7.25 billion and profits of 341 million.

PHOTO CREDIT: Yahoo Finance

Why you Should Not?

1. Newmont faces tough competition from other mining companies like Barrick Gold, Kinross Gold, Yamana Gold, and many others. This competition might hurt the company’s growth in the future.
2. The stock is reliant on strong metal prices to continue moving higher. During times where these companies are facing weak metal prices, the stock will fall. This reliance on strong metal prices to turn a profit might hurt the company in the future.

MY OPINION

In my opinion, I think that Newmont Corporation is a decent long-term investment. This is because it offers a safe-haven to investors during times of economic recession, high gold prices, wide areas of production, stronger economy returning, and rising revenues and profits. However, competition and its reliance on strong metal prices might hurt the company.