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Does this mining stock have an entry point?

Commentaries & Views

Newmont Corporation (NYSE:NEM) is the world’s largest gold mining company and a producer of copper, silver, zinc, and lead. It's been the best of times and the worst of times for NEM in 2021. The stock roared to a record high of $75.31 on May 19, only to carve out a channel of lower lows all summer that culminated in a Sept. 20 annual bottom of $53.52. This begs the question: is it time to buy the dip?

Newmont stock is now down 8% in 2021, and has taken a 13% haircut year-over-year. The shares' descending 40-day moving average has kept a lid on any breakouts in the last three months. Downgrades could weigh on NEM, too, considering four brokerages in coverage maintain a "buy" or better rating, with zero "sells" on the books.

Based on a fundamentals review, Newmont stock offers solid returns through its high-yielding dividend, with a forward dividend of $2.20 and a dividend yield of 4.07%. In addition, NEM has a decent valuation with a price-earnings ratio of 15.25. The gold mining company has also experienced strong and consistent growth in recent years, increasing revenues 72% since fiscal 2018 and adding nearly $3 billion to rolling net income since fiscal 2017. In general, the biggest fundamental flaw in Newmont stock lies in its forward price-earnings ratio of 17.73, which signals an expected decrease in earnings from Wall Street.

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