Barrick Gold
PART B.
1. One organization that I feel has the best longterm position in terms of their stock market price is Barrick Gold. http://finance.yahoo.com/q/bs?s=ABX+Balance+Sheet&annual http://www.barrick.com/investors/annual-report/financial-highlights/default.aspx
The most important factor in any organization from what I learnt is how much it can pay its shareholders in dividends.
Barrick gold has increased per year their annualized dividend US cents per share from 48 cents per share in 2010 to 60 cents per share in 2011 and then a significant 80 cents per share in 2012. As per their website, “Barrick's strategy is focused on maximizing risk-adjusted returns and free cash flow to position the company to return more capital to shareholders over time.”
Barrick gold recorded a net earnings of 3.8 billion and operating cash flows of 5.4 billion. This shows that they are able to generate earnings and cash flow and increase their dividends to their shareholders at the same time. There are several opportunities that they have indulged in such as Nevada that will benefit from billions of dollars of investment in mining infrastructure in the state.
Despite all these opportunities, the gold supply from mines had constraint issues that were due to several factors such as higher capital costs and long leadtimes to build new mines as well as complex regulatory requirements. In order to support the gold market, there were capital investments that were made in order to deliver more. By these capital commitments this eliminated free cash flow generation.
This has caused Barrick gold to shift their paradigm to focus more on maximizing free cash flow and growing rates of return rather than a focus on growth and investing more in capital expenditures. Barrick gold has already deferred over $4 billion in capital spending plans and reduced targets only on the profitable ounces. They have put on hold any plans to build any new mines. In the future, they have
1. One organization that I feel has the best longterm position in terms of their stock market price is Barrick Gold. http://finance.yahoo.com/q/bs?s=ABX+Balance+Sheet&annual http://www.barrick.com/investors/annual-report/financial-highlights/default.aspx
The most important factor in any organization from what I learnt is how much it can pay its shareholders in dividends.
Barrick gold has increased per year their annualized dividend US cents per share from 48 cents per share in 2010 to 60 cents per share in 2011 and then a significant 80 cents per share in 2012. As per their website, “Barrick's strategy is focused on maximizing risk-adjusted returns and free cash flow to position the company to return more capital to shareholders over time.”
Barrick gold recorded a net earnings of 3.8 billion and operating cash flows of 5.4 billion. This shows that they are able to generate earnings and cash flow and increase their dividends to their shareholders at the same time. There are several opportunities that they have indulged in such as Nevada that will benefit from billions of dollars of investment in mining infrastructure in the state.
Despite all these opportunities, the gold supply from mines had constraint issues that were due to several factors such as higher capital costs and long leadtimes to build new mines as well as complex regulatory requirements. In order to support the gold market, there were capital investments that were made in order to deliver more. By these capital commitments this eliminated free cash flow generation.
This has caused Barrick gold to shift their paradigm to focus more on maximizing free cash flow and growing rates of return rather than a focus on growth and investing more in capital expenditures. Barrick gold has already deferred over $4 billion in capital spending plans and reduced targets only on the profitable ounces. They have put on hold any plans to build any new mines. In the future, they have