Barrick Gold Video 18.02.21.
Barrick Gold Proposed A Special Dividend Of $0.42 Per Share
Shares of Barrick Gold are down by about 2% in today’s trading after the release of the company’s fourth-quarter earnings report.
Barrick Gold reported revenue of $3.28 billion and GAAP earnings of $0.39 per share, beating analyst estimates on earnings and missing them on revenue.
Barrick Gold maintained its quarterly dividend of $0.09 per share and proposed a special distribution worth $750 million, or $0.42 per share. The company explained that it had proceeds of $1.5 billion from the sale of non-core assets since 2019, and it decided to return half of this capital to shareholders.
Barrick Gold managed to deliver production and costs which were in line with its previous guidance despite the challenges posed by the coronavirus pandemic. However, the company’s solid financial performance in the third quarter failed to serve as a bullish catalyst today as traders remained focused on the recent gold price dynamics.
What’s Next For Barrick Gold?
While shares of Barrick Gold were gaining ground in premarket trading after the release of the quarterly report, they quickly lost momentum and found themselves under pressure together with shares of most gold miners.
Gold has recently managed to settle below the $1800 level which hurt market sentiment. The current market mood is bearish, and even the announcement of a special dividend did not provide enough support to the stock.
Gold miners have never attracted income-oriented investors as they were focused on developing mines rather than paying hefty dividends. As a result, the dividend yield of leading gold miners, including Barrick Gold, is low.
In this light, even a special dividend may not attract enough demand for the stock in case traders remain focused on the near-term dynamics of the gold price.
At the same time, the stock has entered into an attractive territory from a valuation point of view after it declined from the $30 level towards the $20 level. Currently, Barrick Gold is trading at less than 15 forward P/E which looks like a reasonable price for one of the biggest gold miners.
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