Loading...

B2Gold

AMEX:BTG
Snowflake Description

High growth potential with adequate balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
BTG
AMEX
$3B
Market Cap
Gold
Company description

B2Gold Corp, together with its subsidiaries, engages in the exploration and development of mineral properties in Nicaragua, the Philippines, Namibia, Mali, Colombia, Burkina Faso, and Finland. More info.


Add to Portfolio Compare Print Invest

Value

 Is B2Gold undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of B2Gold to its discounted cash flow value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of B2Gold is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avacados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for B2Gold's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are B2Gold's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Overvalued based on earnings compared to the Materials industry average.
  • Overvalued based on earnings compared to the overall market.
Price based on expected Growth
Does B2Gold's expected growth come at a high price?
  • Good value based on expected growth next year.
Price based on value of assets
What value do investors place on B2Gold's assets?
  • Good value based on assets compared to the Materials industry average.
X
Value checks
We assess B2Gold's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) (Click here or on bar chart for details of DCF calculation.)
  2. Is the PE ratio less than the market average, and/ or less than the Materials industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Materials industry average (and greater than 0)? (1 check)
  5. B2Gold has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (218.16%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (Free cash flow to Equity)

The calculations below outline how an intrinsic value for B2Gold is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$683

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $467 × (1 + 2.3%) ÷ (17.32% – 2.3%)

Terminal value based on the Perpetuity Method where growth (g) = 2.3%:
$3,191

Present value of terminal value:
$1,436

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value

Value = Total value / Shares Outstanding ($2,119 / 1,001)

Value per share:
$2.12

Current discount (share price of $2.62): -24%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 17.32% = 2.33% + (1.954 * 7.67%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.954 = 1.757 (1 + (1- 30%) (16.05%))

Levered Beta used in calculation = 1.954



Equivalent number of shares

If the companies market cap is in a different currency to that of the listing the equivalent number of shares outstanding must be calculated.

Market Cap (CAD): 3,283

Exchange rate CAD/USD = 0.799

Market Cap (USD): $2,623

Equivalent shares outstanding: $2,623 / $2.62 = 1,001



Assumptions
  1. The risk free rate of 2.33% is from the 10 year government bond rate in US.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (10%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is B2Gold expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

    The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

    Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
    3 year growth
    693%
    Expected earnings growth over 3 years.
    Future Earnings growth analysis
    Is B2Gold expected to grow at an attractive rate? We look at the 1 year and 3 year growth below.

    Are B2Gold's annual earnings growth expected to exceed 3.4% over the next 3 years?

    • After 1 year
    • After 3 years
    1 & 3 year estimated growth in earnings
    Past and Future Earnings per Share
    The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occured. We also show the highest and lowest estimates looking forward to see if there is a wide range.
    Analysts growth expectations
    2 year growth check
    Super high growth metrics x1.5?

    Which of the these is expected to increase by over 50% in 2 year's time?

    • Revenue
    • Cash flow
    • Profit
    Performance in 3 years
    In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
    • B2Gold is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

    Improvement & Relative to industry
    • Expected to be less than the Materials industry average.
    • An improvement in B2Gold's performance (ROE) is expected over the next 3 years.
    X
    Future performance checks
    We assess B2Gold's future performance by looking at:
    1. Is the growth in earnings expected to beat the low risk savings rate, plus a premium to keep pace with inflation, in 1 year and 3 years? (2 checks)
    2. Does the average analyst expect Revenue to increase by 50% or more in 2 years? (1 check)
    3. Does the average analyst expect Operating Cash Flow to increase by 50% or more in 2 years? (1 check)
    4. Does the average analyst expect Net Income (Profit) to increase by 50% or more in 2 years? (1 check)
    5. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
    Some of the above checks will fail if the company is expected to be loss making in the relevant year.
    B2Gold has a total score of 5/6, see the detailed checks below.

    Note: If no +3 year data is available, +2.5 year data may be used.

    Note 2: We use GAAP per Share in all our calculations.

    Full details on the Future part of the Simply Wall St company analysis model.

    Past Performance

     How has B2Gold performed over the past 5 years?

    The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
    Past earnings growth
    Below we compare B2Gold's growth in the last year to its industry (Materials).
    Past Earnings growth analysis
    We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
    • B2Gold's has become profitable in the last year making it difficult to compare the industry average.
    • B2Gold's has been loss making last year but is now profitable.
    • B2Gold earnings have fallen over the past 5 years.
    Profit History
    B2Gold's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
    Performance last year
    We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
    • Poor return on shareholders funds (ROE) last year.
    • B2Gold performed worse than the Materials industry average based on return on assets (ROA) last year.
    • Performance based on revenue producing assets (ROCE) has been diminishing over 3 years.
    X
    Past performance checks
    We assess B2Gold's performance over the past 5 years by checking for:
    1. Has earnings per share (EPS) increased in past 5 years? (1 check)
    2. Has the EPS growth in the last year exceeded that of the Materials industry? (1 check)
    3. Is the current EPS growth higher than the average annual growth over the past 5 years? (1 check)
    4. Is the Return on Equity (ROE) higher than 20%? (1 check)
    5. Is the Return on Assets (ROA) above industry average? (1 check)
    6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
    The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
    B2Gold has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations.

    Full details on the Past part of the Simply Wall St company analysis model.

    Health

     How is B2Gold's financial health and their level of debt?

    A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

    The boxes below represent the relative size of what makes up B2Gold's finances.

    The net worth of a company is the difference between its assets and liabilities.
    Net Worth
    • B2Gold is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
    • B2Gold's long term commitments exceed its cash and other short term assets.
    Balance sheet
    This treemap shows a more detailed breakdown of B2Gold's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
    Assets
    Liabilities and shares
    The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
    • High level of stock/ inventory/ unsold assets.
    • Total debt is not covered by total short term assets.
    Historical Debt
    Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

    The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

    If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
    • The level of debt (36%) compared to net worth is satisfactory (less than 40%).
    • The level of debt compared to net worth has increased over the past 5 years (0% vs 36% today).
    • Total debt is well covered by annual operating cash flow (greater than 20% of total debt).
    • Interest on debt is well covered by earnings (16.6x coverage).
    X
    Financial health checks
    We assess B2Gold's financial health by checking for:
    1. Are short term assets greater than short term liabilities? (1 check)
    2. Are short term assets greater than long term liabilities? (1 check)
    3. Has the debt to equity ratio increased in the past 5 years? (1 check)
    4. Is the debt to equity ratio over 40%? (1 check)
    5. Is the debt covered by short term assets? (1 check)
    6. Are earnings greater than 5x the interest on debt (if comapany pays interest at all)? (1 check)
    7. B2Gold has a total score of 4/6, see the detailed checks below.


    Full details on the Health part of the Simply Wall St company analysis model.

    Dividends

     What is B2Gold's current dividend yield, its reliability and sustainability?

    Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
    Annual Dividend Income
    Dividend payments
    0%
    Current annual income from B2Gold dividends.
    If you bought $2,000 of B2Gold shares you are expected to receive $0 in your first year as a dividend.
    Dividend Amount
    Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
    • Paying below low risk savings rate. (2.25%)
    • Paying below the markets top dividend payers. (3.18%)
    Historical dividend yield
    It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

    We also check to see if the dividend has increased in the past 10 years.
    • Not paying a notable dividend.
    • Not paying a notable dividend.
    Current Payout to shareholders
    What portion of B2Gold's earnings are paid to the shareholders as a dividend.
    • Not paying a notable dividend.
    Future Payout to shareholders
    • Insufficient estimate data to determine if a dividend will be paid in 3 years.
    X
    Income/ dividend checks
    We assess B2Gold's dividend by checking for:
    1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
    2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
    3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
    4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
    5. How sustainable is the dividend, can B2Gold afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
    6. B2Gold has a total score of 0/6, see the detailed checks below.


    Full details on the Dividends part of the Simply Wall St company analysis model.

    Management

     What is the CEO of B2Gold's salary, the management and board of directors tenure and is there insider trading?

    Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
    CEO
    Clive Johnson, image provided by Google.
    Clive Johnson
    COMPENSATION$5,305,796
    AGE59
    CEO Bio

    Mr. Clive Thomas Johnson has been the Chief Executive Officer and President of B2Gold Corp. since March 2007 and December 17, 2006 respectively. Mr. Johnson served as President and Chief Executive Officer of EastWest Gold Corporation since July 1993 and June 1989 respectively and serves as its Chief Operating Officer. He served as the Chairman of EastWest Gold Corporation. He has been the Chairman of Uracan Resources, Ltd. since November 2013. He serves as a Director of CGA Mining Limited. He has been a Director of B2Gold Corp. since December 17, 2006. He has been a Director of Uracan Resources, Ltd. since January 9, 2007. He has been a Director of EastWest Gold Corporation since December 5, 1988. He serves as Member of Corporate Governance & Nominating Committee, Member of Disclosure Committee and Member of Hedging Committee for EastWest Gold Corporation. He served as a Director of Victoria Gold Corp. since April 30, 1987. He served as a Director of Consolidated Westview Resource Corp. since April 30, 1987. He served as a Director of Consolidated Puma Minerals Corp. since March 3, 1988. He served as a Director of Arizona Star Resource Corp. from April 10, 1987 to December 2004.

    CEO Compensation
    • CEO's compensation has been consistent with company performance over the past year.
    • CEO's compensation is higher than average for a company of this size and profit level.
    Management Team Tenure

    Average tenure of the B2Gold management team:

    Management tenure
    7.3 years
    • The average tenure for the B2Gold management team is over 5 years, this suggests they are a seasoned and experienced team.
    Management Team

    Clive Johnson

    TITLE
    President
    COMPENSATION
    $5,305,796
    AGE
    59

    Mike Cinnamond

    TITLE
    Senior VP of Finance & CFO
    COMPENSATION
    $1,606,274
    AGE
    50

    Bill Lytle

    TITLE
    Senior Vice President of Operations
    COMPENSATION
    $1,911,863

    Roger Richer

    TITLE
    Executive VP
    COMPENSATION
    $1,405,100
    AGE
    64

    Dennis Stansbury

    TITLE
    Senior Vice President of Engineering & Project Evaluations
    COMPENSATION
    $1,250,000
    AGE
    64

    Tom Garagan

    TITLE
    Senior Vice President of Exploration
    COMPENSATION
    $1,406,118
    AGE
    58
    Board of Directors Tenure

    Average tenure of the B2Gold board of directors:

    Board tenure
    8.4 years
    • The tenure for the B2Gold board of directors is about average.
    Board of Directors

    Bob Cross

    TITLE
    Chairman
    COMPENSATION
    $328,700
    AGE
    58

    Clive Johnson

    TITLE
    President
    COMPENSATION
    $5,305,796
    AGE
    59

    Bob Gayton

    TITLE
    Independent Director
    COMPENSATION
    $210,800
    AGE
    77

    George Johnson

    TITLE
    Director
    COMPENSATION
    $173,717
    AGE
    68

    Jerry Korpan

    TITLE
    Independent Director
    COMPENSATION
    $190,800
    AGE
    71

    Bongani Mtshisi

    TITLE
    Independent Director
    COMPENSATION
    $190,800
    AGE
    38
    Recent Insider Trading
    • B2Gold insiders have sold more shares than they have bought in the past 3 months.
    Who owns this company?
    X
    Management checks
    We assess B2Gold's management by checking for:
    1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
    2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
    3. Is the average tenure of the management team less than 2 years? (1 check)
    4. Is the average tenure of the board of directors team less than 3 years? (1 check)
    5. B2Gold has a total score of 6/6, this is not included on the snowflake, see the detailed checks below.


    Note: We use the top 6 management executives and board members in our calculations.

    Note 2: Insider trading include any internal stakeholders and these transactions.

    Full details on the Management part of the Simply Wall St company analysis model.

    Company News

    Company Info

    Description

    B2Gold Corp, together with its subsidiaries, engages in the exploration and development of mineral properties in Nicaragua, the Philippines, Namibia, Mali, Colombia, Burkina Faso, and Finland. It primarily explores for gold, silver, and copper deposits. The company’s production properties include the La Libertad mine with an exploitation concession covering an area of 10,950 hectares and the El Limon mine covering an area of 12,000 hectares located in Nicaragua; the Masbate mine covering an area of approximately 15,209 hectares located in the Philippines; and the Otjikoto mine covering an area of 6,933.99 hectares located in Namibia. It also holds 90% interest in the Fekola project located in Mali; 81% interest in the Kiaka gold project located in Burkina Faso; and 49% joint venture interest in the Gramalote property located in Colombia, as well as an interest in the Quebradona property located in Colombia. The company was incorporated in 2006 and is headquartered in Vancouver, Canada.

    Details
    Name:B2Gold Corp.
    Ticker:BTG
    Exchange:AMEX
    Founded:2006
    Market Cap:$3,283 million
    Website:http://www.b2gold.com
    Listings
    Map

    Three Bentall Centre, Vancouver, V7X 1J1, Canada

    Number of employees
    Street

    Current staff
    Staff numbers
    2,719
    B2Gold employees.
    Industry
    Industry:Gold
    Sector:Materials