On Thursday, U.S. government data showed that the nation’s economy contracted 1.4% in the most recent quarter. Inflationary pressures and persistent labor shortages are taking a toll on the economy. The first quarter GDP contrasts with last year’s 5.7% economic growth. Furthermore, the surging inflation has driven the Fed to commit to a half percentage point interest rate hike in May.
Gold prices soared on the news that the economy had retreated. Gold prices jumped, with the June gold futures up 0.30% on the day at $1,894.40 per ounce. In addition, reflecting upon the yellow metal’s appeal as a safe-haven asset amid current economic uncertainties created by the geopolitical crises, inflation, and supply chain issues, global gold demand rose 34% in the first quarter. Also, gold prices in U.S. dollars for the same quarter climbed 5% on average both quarterly and annually.
Gold Fields Limited (GFI)
Based in Sandton, South Africa, GFI is a gold producer that holds reserves and resources in Chile, South Africa, West Africa, Australia, and Peru. The company also explores for copper deposits.
For its fiscal year ended Dec 31, 2021, GFI’s revenue increased 7.8% year-over-year to $4.20 billion. Its headline earnings and headline earnings per share attributable to owners of the parent came in at $882.60 million and 99 cents, respectively, up 21.6% and 20.7% from the prior year.
The consensus EPS estimate of $1.04 for 2022 indicates a 4.1% year-over-year increase. And the $4.22 billion consensus revenue estimate for the same year reflects a 0.2% rise from the prior year.
Over the past year, the stock has gained 42.3% in price and 24.3% year-to-date to close yesterday’s trading session at $13.66.
GFI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
GFI has a Quality grade of B. In the 38-stock Miners – Gold industry, it is ranked #6.
Click here to see the additional POWR Ratings for GFI (Growth, Value, Momentum, Stability, and Sentiment).
Yamana Gold Inc. (AUY)
AUY is a precious metals producer that engages in gold and silver production and holds development stage properties and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina. The company is headquartered in Toronto, Canada.
On April 27, AUY announced its $0.03 per share second-quarter dividend, which totals $0.12 per share annually. The dividend is payable on July 14, 2022, and reflects the company’s cash generation ability.
On April 4, AUY reported positive results regarding its exploration activities in its El Peñón mine, its Odyssey project at Canadian Malartic, and its Wasamac project. These results might create strategic benefits for the company.
For its fiscal first quarter, ended March 31, 2022, AUY’s revenue increased 4.7% year-over-year to $441.90 million. Its adjusted net earnings rose 21.5% from the prior-year quarter to $83.60 million. Its adjusted net earnings per share improved 28.6% from the same period the prior year to $0.09.
The Street’s $466.17 million revenue estimate for the fiscal quarter ending June 30, 2022,indicates a 6.6% year-over-year improvement.
The stock has gained 32.2% in price year-to-date and 31.6% over the past six months to close yesterday’s trading session at $5.58.
It is no surprise that AUY has an overall B rating, which translates to Buy in our POWR Rating system.
AUY has a B grade for Sentiment and Quality. It is ranked #8 in the Miners – Gold industry.
To see the additional POWR Ratings for Growth, Value, Momentum, and Stability for AUY, click here.
DRDGOLD Limited (DRD)
DRD operates as a gold mining company that engages in the surface gold tailings retreatment business in South Africa. Based in Johannesburg, South Africa, the company participates in exploration, extraction, processing, and smelting activities.
On February 16, DRD announced an interim cash dividend of 20 SA cps, payable on March 14, 2022. The dividend will be paid out of income reserves and reflects the company’s ability to pay back shareholders.
For the six months ended Dec. 31, 2021, DRD’s cash and cash equivalents balance came in at R2.24 billion ($140.21 million), registering an increase of 3.2% from the prior-year period. For the period, its revenue and headline earnings stood at R2.50 billion ($156.46 million) and R495.90 million ($31.05 million), respectively. Its headline EPS came in at 57.60 SA cps.
The Street expects DRD’s EPS to increase 5.4% year-over-year to $0.79 for fiscal 2023 (ending June 2023), while analysts expect revenue to rise 9.9% from the prior year to $369.89 million for the same year.
DRD’s shares have gained 7.4% over the past three months and 2.5% intraday to close yesterday’s trading session at $8.24.
DRD’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
DRD has a Value grade of B. It is ranked #7 in the Miners – Gold industry.
Click here to see the additional POWR Ratings for Growth, Momentum, Stability, Sentiment, and Quality for DRD.
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GFI shares were trading at $13.59 per share on Friday afternoon, down $0.07 (-0.51%). Year-to-date, GFI has gained 24.71%, versus a -12.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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