Overview of Newmont Corporation & Intrinsic Value calculation using Dividend Discount Model (DDM)
Newmont Corporation https://www.newmont.com/investors/reports-and-filings/default.aspx Newmont is the world s leading gold company and a producer of copper, silver, zinc and lead. Newmont owned more than half of the world s Tier 1 gold mines. The Company s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social, and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution and technical expertise. Newmont was founded in 1921 and has been publicly traded since 1925.
DDM Details of Newmont Corporation shown below, US$ in millions, except per share data
|
Year |
Value |
Dividend per share or Terminal Value |
Present Value at 9.17% |
|
0 |
DPS0 |
1.22 |
1.22 |
|
1 |
DPS1 |
1.23 |
1.12 |
|
2 |
DPS2 |
1.31 |
1.04 |
|
3 |
DPS3 |
1.37 |
1.01 |
|
4 |
DPS4 |
1.44 |
0.963 |
|
5 |
DPS5 |
1.53 |
0.931 |
|
5 |
Terminal Value (TV5) |
51.5 |
32.88 |
|
Intrinsic value of Newmont Corporation |
$39.12 |
|
Market cap of Newmont Corporation |
$54.41 Billion |
|
Intrinsic value of Newmont Corporation common stock (per share) |
$39.12 |
|
Current share price on 10/31/2024 |
$48.36 |
Required rate of Return
Assumptions
|
Rate of return on LT Treasury Composite(Rf) |
4.36% |
|
Expected rate of return on market portfolio(E(RM) |
13.81% |
|
Systematic risk of Newmont Corporation. Common stock (β) |
0.51 |
|
Required rate of return on Newmont Corporation Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +0.51[13.81% - 4.36%] |
9.17% |
Dividend Growth rate Forecast
Newmont Corporation. H-Model
|
Year |
Value |
Growth Rate |
|
1 |
g1 (PRAT Model) |
1.12% |
|
2 |
g2 (Linear Interpolation) |
2.65% |
|
3 |
g3 (Linear Interpolation) |
4.1% |
|
4 |
g4 (Linear Interpolation) |
5.5% |
|
5 |
g5 (Single stage model) |
6% |
2023 Calculations
|
Dividend yield |
2.54% |
|
Profit margin |
-21.11% |
|
Asset turnover |
0.21 |
|
Financial Leverage |
2.11 |
|
EPS |
-2.17 |
Sources : Form 10K of Newmont Corporation Incorporated for the fiscal year 2023, https://www.newmont.com/about-us/default.aspx, https://www.stock-analysis-on.net/ , https://finance.yahoo.com/ , https://companiesmarketcap.com/
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