1 Canadian Mining Stock Worth a Long-Term Investment

Here’s why Barrick Gold (TSX:ABX) remains a top Canadian mining stock long-term investors may want to consider on dips right now.

| More on:

Canadian mining stocks are increasingly becoming more attractive for investors to consider. The rising price of gold has boosted the value of companies like Barrick Gold (TSX:ABX) in recent quarters. In fact, this stock is now trading near its highest level over the past year, with the potential to hit multi-year highs in short order.

This Canadian gold miner is one of the largest in the world, meaning it provides excellent exposure for investors looking to play gold. If gold prices continue to rise, that should be bullish for investors in Barrick Gold. Here’s why.

What Barrick Gold does

A top precious metals miner based in Canada, Barrick Gold operates a number of mines around the world. These mines span North America, Australia, Africa, and South America. The company develops and explores mineral properties and owns and operates mines, such as Nevada Gold Mines, Buzwagi, Hemlo, North Mara, and others.

Barrick Gold also produces commodities such as silver, gold, and copper and sells gold bullion in the gold spot market. Furthermore, it executes copper operations in Lumwana, Zaldivar, and Jabal Sayid mines.

Rising gold prices boosting Barrick’s financial performance

In the first quarter of 2024, Barrick Gold reported revenue of US$2.7 billion and cost of sales of US$1.9 billion. This translated into net earnings for the period of US$295 million and adjusted net earnings of US$333 million. In addition, the company highlighted attributable EBITDA of US$907 million and attributable EBITDA margin of 41%, an increase of 5% year over year. 

These strong results were mainly due to rising gold prices, which are currently trading near an all-time high. With most of the company’s debt denominated in dollars and its revenue a function of precious metals prices, the recent surge we’ve seen across certain commodities has boosted the profile of this miner. Trading around 21 times earnings with a 2.2% dividend yield, this is an attractive stock at current levels. On future dips, this is a stock that could become even more attractive as both a value and dividend play.

A mining stock worth buying and holding long-term

Barrick Gold is one of the largest gold producers in the world, delivering unparalleled growth of reserve base and maintaining the highest gold reserves grade among its competitors. Since the year-end 2019, the company has replaced over 140% of mined gold reserves and has returned US$4.9 billion to shareholders in the form of dividends, share buybacks, and returns of capital. 

In the industry-leading shareholder alignment, Barrick Gold has approved a US$1 billion share-buyback program and reduced net debt by US$ 3.5 billion. Furthermore, the company has invested US$9.8 billion since 2019 to grow and expand its operations globally. These cash flows and robust business models should assist the company in generating higher revenue and increasing its ability to pay even higher dividends to shareholders. 

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Metals and Mining Stocks

farmer holds box of leafy greens
Metals and Mining Stocks

3 Reasons to Buy Nutrien Stock Like There’s No Tomorrow

Nutrien stock has lost 34% of its value just this year alone and looks incredibly cheap today. Yet, secular trends…

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Invest $7,000 in This Dividend Stock for $672 in Passive Income

High yield can be an essential requirement when you need to start even a modestly sized passive income with a…

Read more »

Canadian Dollars bills
Metals and Mining Stocks

2 Cheap Canadian Stocks Under $20 to Buy This November

Cheap TSX stocks such as Endeavour Silver are trading at an attractive valuation in November 2024.

Read more »

nugget gold
Metals and Mining Stocks

Is Franco-Nevada Stock a Buy for its 1.06% Dividend Yield?

A top gold stock with a modest yield is a buy for its lengthy dividend-growth streak.

Read more »

todder holds a gold bar
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell or Hold?

Investing in quality gold mining stocks that trade at a reasonable valuation could help you beat the TSX index over…

Read more »

People walk into a dark underground mine.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Buy?

Let's dive into whether First Quantum Minerals (TSX:FM) is worth buying at current levels, or if investors should sit this…

Read more »

nugget gold
Metals and Mining Stocks

Competitive? Beat the Market With These 2 Dividend-Paying Growth Gems

Investors looking to beat the market buying dividend stocks right now need to focus on this right sectors. Here are…

Read more »