What are we looking for?
Mining companies benefiting from rising commodity prices, with robust earnings, reasonable valuations, and manageable debt.
Demand for key resources like copper is accelerating, driven by global infrastructure spending and the ongoing push for electrification. At the same time, investor sentiment remains cautious amid growing concerns over the rising U.S. deficit, elevated debt levels, and uncertainty surrounding U.S. policy direction. Since the start of the year, precious metal prices have risen sharply which is likely to create a favorable backdrop for the coming quarters.
While Canada is widely recognized as a mining powerhouse, U.S.-listed mining companies are often overlooked by Canadian investors, despite offering solid fundamentals.
The screen
We screened the U.S. Metals and Mining subindustry using the following criteria:
- Market capitalization greater than US$5-billion;
- Debt/EBITDA ratio lower than 1.5;
- Positive change in three-month earnings per share by analysts;
- Positive expected earnings growth in the next year;
For informational purposes, we also added three-month cashflow momentum, price-to-earnings ratio (P/E), forward price-to-earnings ratio (Fwd. P/E), enterprise value (EV) to EBITDA ratio, interest coverage ratio, dividend yield and one-year price change.
More about Inovestor
For 25 years as a pioneering Canadian fintech, we’ve consistently pushed the boundaries to empower investment advisors with advanced, easy-to-use investment strategies. Discover more about our journey and offerings on our website.
What we found
Overlooked U.S. mining companies
| TICKER | NAME | PRICE (US$) | MKT CAP (Bil. US$) | 3M CF MOM. (%) | 3M EPS REV. (%) | P/E | FWD. P/E | FWD. EPS GRWTH (%) | EV/EBITDA | DEBT/EBITDA | INT. COV. | 1Y PRICE RTN. (%) | DIV. YIELD (%) |
| CDE-N | Coeur Mining Inc. | 9.1 | 5.8 | 44.0 | 24.2 | 27.5 | 13.2 | 109.3 | 10.1 | 0.8 | 5.8 | 43.2 | 0.0 |
| GFI-N | Gold Fields Limited | 24.2 | 21.7 | 15.4 | 14.5 | 17.7 | 7.9 | 123.7 | 9.0 | 0.8 | – | 45.7 | 2.2 |
| RGLD-Q | Royal Gold Inc | 154.8 | 10.2 | 10.4 | 13.4 | 26.4 | 20.7 | 27.3 | 16.2 | 0.0 | 75.8 | 11.6 | 1.2 |
| NEM-N | Newmont Corporation | 58.2 | 64.8 | 10.5 | 11.5 | 13.9 | 11.9 | 17.5 | 7.3 | 0.8 | 19.8 | 22.5 | 1.7 |
| B-N | Barrick Mining Corp.* | 44.8 | 64.3 | -8.9 | 11.3 | 32.2 | 25.2 | 28.1 | 8.8 | 1.0 | 23.9 | -2.4 | 0.7 |
| FCX-N | Freeport-McMoRan Inc. | 20.7 | 35.6 | 6.9 | 10.1 | 14.5 | 10.6 | 36.4 | 6.8 | 0.7 | 11.3 | 11.8 | 1.9 |
| SCCO-N | Southern Copper Corp. | 52.7 | 5.9 | -2.3 | 4.9 | 19.7 | 11.9 | 64.6 | 8.9 | 1.8 | 9.9 | -9.3 | 1.4 |
| CMC-N | Commercial Metals Co | 96.4 | 77.5 | 5.9 | 4.6 | 21.5 | 20.6 | 4.5 | 12.0 | 1.1 | 17.0 | -4.5 | 2.9 |
| NUE-N | Nucor Corporation | 140.6 | 32.5 | -16.6 | 1.2 | 22.8 | 17.6 | 29.7 | 11.1 | 1.9 | 9.1 | -15.1 | 1.6 |
| RS-N | Reliance Inc. | 336.2 | 17.7 | -6.3 | 1.1 | 23.5 | 20.3 | 15.8 | 15.0 | 1.0 | 25.5 | 9.2 | 1.4 |
Coeur Mining Inc. (CDE-N) is a gold and silver producer in the United States, Canada, and Mexico. The company stands out with the highest earnings revision of 24.2 per cent with earnings growth expected to top 109.3 per cent, reflecting extremely positive sentiment. The company has the highest cash flow momentum of 44 per cent potentially reflecting the impact of higher commodity prices on its financial results. The share price appreciated 43.2 per cent in the last year, reflecting solid market sentiment.
Royal Gold Inc (RGLD-Q) acquires and manages precious metal streams and royalty interests; it also provides financing to mining projects. With earnings revision of 13.4 per cent, the third highest of our list. Royal Gold has little to no debt which impacts positively its debt/EBITDA ratio to essentially zero. This likely indicates that the company has strong flexibility to pursue new income streams as opportunities arise. This potential growth is typically not captured in earnings estimates, as analysts rarely attempt to forecast future acquisitions.
Newmont Corporation (NEM-N), a global mining company engaged in the exploration and production of gold and other metals, also trades on the TSX under the symbol NGT-T. It may appeal to value investors, with the lowest P/E and EV/EBITDA ratios in our screen at 13.9 and 7.3, respectively, and the second-lowest forward P/E at 11.9. Although the company shows solid quarterly momentum at 10.5 per cent, its projected EPS growth of 17.5 per cent is the second lowest on our list highlighting that strong value metrics may come with more modest growth expectations.
