Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver.
Business Growth For The Year Ended 2019-12-31
The company reports a substantial amount of sales growth of 9% y/y with a gross profit ratio of 28%. Last year, annual sales were equal to $3497. 3 million. KGC reports large research and development expenses growth, which money managers will appreciate. It means that Kinross Gold Corp is in the process of creating new products. Summarising, market participants will most likely expect sales in the near future. R&D expenses are equal to $113. 5 million.
KGC reports EBITDA growth of 200%, and an EBITDA ratio of 49%. The EBITDA grows since the cost of revenue declined a -4%. Additionally, operating income is another positive feature of KGC. The company’s operating income grows at 394% y/y. I also appreciate that net income grew a 3144%. D&A expense decreased a -5%.
Balance Sheet As Of 2019-12-31
With an assets to liabilities ratio of more than 2x, KGC’s balance sheet seems very solid. In Q3, Kinross Gold Corp reported $10008 million in assets, with total liabilities of $4128 million. Furthermore, Kinross Gold Corp has positive working capital, which traders will like. It means that KGC can cover its short-term liabilities when they come due.
KGC’s short term debt is less significant than the company’s cash and cash equivalents. I believe that Kinross Gold Corp may not have to worry about any liquidity risk. Besides, the price to book value is below 1. 5x, which means that KGC is undervalued. Kinross Gold Corp has $10008 million in total assets, and $4128 million in total liabilities. KGC’s debt to equity ratio is below 2x. In short, the debt level appears to be under control. Note that Kinross Gold Corp reports cash and cash equivalents of $933 million, and net debt of $989 million. With regards to the EV/EBITDA, Kinross Gold Corp trades at 12. In my experience, shareholders will most likely appreciate this low figure.
Quarterly Results For The Quarter Ended 2020-09-30
In Q3 KGC reported quarterly sales of $1131 million, and gross profit of $487 million. The gross profit ratio was equal to 43%. Moreover, KGC is profitable, which is positive. Kinross Gold Corp released positive quarterly EBITDA of $598. 8 million. Taking this into account, many traders will most likely have a look at KGC. KGC also showed positive net income of $240. 7 million. I believe that when more investors get to know the financial statistics of KGC, the stock demand will increase.
Valuation and Risks
I assume sales of $3497 million. So, KGC trades at 0.61x forward sales. In my view, it can be justified due to the fact that Kinross Gold Corp has decent margins. Institutional investors MUFG SECURITIES (CANADA), LTD. , Voya Financial Advisors, Inc. , and FormulaFolio Investments, LLC are Kinross Gold Corp investors.
If you see an error, please contact the editor. We don’t own KGC’s shares, and this is our opinion. We do not offer a recommendation to buy or sell any stock.