Is Barrick Gold Corp. the Top Gold Stock to Buy Today?

Barrick Gold Corp. (TSX:ABX)(NYSE:ABX) released first-quarter earnings on April 27 and its stock has reacted by rising over 3%. Should you buy in to the rally?

| More on:
The Motley Fool

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Barrick Gold Corp. (TSX:ABX)(NYSE:ABX), one of the largest producers of gold in the world, announced first-quarter earnings results after the market closed on April 27, and its stock responded by rising over 3% in the trading session that followed. Let’s break down the quarterly results to determine if we should consider buying in to this rally, or if we should look elsewhere in the industry for an investment instead.

A quarter of year-over-year declines

Here’s a summary of Barrick’s first-quarter earnings results compared with its results in the same period a year ago. All figures are in U.S. dollars.

Metric Q1 2015 Q1 2014
Adjusted Earnings Per Share $0.05 $0.20
Revenue $2.25 billion $2.65 billion

Source: Barrick Gold Corp.

Barrick’s adjusted earnings per share decreased 75% and its revenue decreased 15.2% compared with the first quarter of fiscal 2014, as its adjusted net income decreased 73.9% to $62 million. These weak results can be attributed to three primary factors.

First, Barrick sold just 1.39 million ounces of gold during the quarter, a decrease of 14.4% year over year. Second, the average realized price of gold fell to $1,219 per ounce during the quarter, a decrease of 5.1% year over year. Third, the company’s all-in sustaining costs per ounce of gold rose to $927 during the quarter, an increase of 10.6% year over year.

Here’s a quick breakdown of eight other notable statistics and updates from the report compared with the year-ago period:

  1. Total gold production decreased 12.5% to 1.39 million ounces
  2. Total copper production increased 13.5% to 118 million pounds
  3. Total copper sold increased 9% to 121 million pounds
  4. Average realized price of copper decreased 15.8% to $2.55 per pound
  5. Cash costs decreased 12.8% to $1.84 per pound of copper
  6. Operating cash flow decreased 46% to $316 million
  7. Income before income taxes decreased 53.4% to $194 million
  8. Ended the quarter with $2.26 billion in cash and cash equivalents, a decrease of 16.3% from the beginning of the quarter

Also, after the market closed on April 28 Barrick announced that it would be maintaining its quarterly dividend of $0.05 per share, and the next payment will come on June 15 to shareholders of record at the close of business on May 29.

Is Barrick the top gold producer to buy today?

Even though I do not think the post-earnings rally in Barrick’s stock was warranted, I do think it represents a great long-term investment opportunity. I think this because it trades at attractive valuations, including just 22.5 times fiscal 2015’s estimated earnings per share of $0.71 and only 18.4 times fiscal 2016’s estimated earnings per share of $0.87, both of which are inexpensive given its long-term growth potential.

With the inexpensive valuations in mind, I think Barrick Gold Corp. represents one of the best long-term investment opportunities in the gold industry today. Foolish investors should take a closer look and consider scaling in to long-term positions.

Should you invest $1,000 in Barrick Gold right now?

Before you buy stock in Barrick Gold, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Barrick Gold wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Metals and Mining Stocks

farmer holds box of leafy greens
Metals and Mining Stocks

Down by 47%: Is Nutrien Stock a Good Buy Right Now?

As the world’s largest company in its industry, here’s why Nutrien (TSX:NTR) stock might be an excellent buy despite its…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

2 Canadian Mining Stocks to Buy as Gold Prices Hit Highs

Agnico Eagle Mines (TSX:AEM) and another top gold mining stock could shine for investors in May 2025.

Read more »

Metals and Mining Stocks

Gold Price Zooms to New Record: How to Invest in Gold Today

Four ways to invest in gold today.

Read more »

nugget gold
Metals and Mining Stocks

2 Gold Stocks I’d Consider for a $10,000 Investment Amid Economic Uncertainty

Investing in undervalued TSX gold stocks such as Newmont should help you generate double-digit gains in the next 12 months.

Read more »

nugget gold
Metals and Mining Stocks

How I’d Use $10,000 in Gold and Silver Investments as Inflation Protection

Quality gold and silver mining stocks offer you portfolio diversification in 2025.

Read more »

Make a choice, path to success, sign
Metals and Mining Stocks

3 Canadian Value Stocks I’d Add to My TFSA for Tax-Free Compounding

Here are three top Canadian value stocks you can buy and hold in a TFSA in April 2025.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA: Invest $10,000 in This TSX Stock That Thrives During Market Volatility

This TSX stock isn't your typical investment, but that could be a major benefit for investors.

Read more »

construction workers talk on the job site
Metals and Mining Stocks

2 Canadian Mining Stocks to Buy and Hold in Your TFSA for Long-Term Resource Exposure

Cameco (TSX:CCO) and another miner could boom again in 2025.

Read more »