ASX:NCM

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Newcrest Mining Limited, together with its subsidiaries, engages in the exploration, mine development, mine operation, and sale of gold and gold/copper concentrates.


Snowflake Analysis

Excellent balance sheet with solid track record.


Similar Companies

Share Price & News

How has Newcrest Mining's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NCM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.8%

NCM

4.3%

AU Metals and Mining

-0.5%

AU Market


1 Year Return

2.0%

NCM

1.6%

AU Metals and Mining

-10.7%

AU Market

Return vs Industry: NCM matched the Australian Metals and Mining industry which returned 1.6% over the past year.

Return vs Market: NCM exceeded the Australian Market which returned -10.7% over the past year.


Shareholder returns

NCMIndustryMarket
7 Day-1.8%4.3%-0.5%
30 Day8.0%5.5%2.4%
90 Day10.9%20.4%10.8%
1 Year3.1%2.0%7.0%1.6%-7.0%-10.7%
3 Year70.2%65.0%70.3%46.6%16.5%1.1%
5 Year189.4%178.0%119.8%75.8%29.8%1.8%

Price Volatility Vs. Market

How volatile is Newcrest Mining's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Newcrest Mining undervalued compared to its fair value and its price relative to the market?

44.63x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NCM (A$32.5) is trading above our estimate of fair value (A$5.97)

Significantly Below Fair Value: NCM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NCM is poor value based on its PE Ratio (44.6x) compared to the AU Metals and Mining industry average (10.5x).

PE vs Market: NCM is poor value based on its PE Ratio (44.6x) compared to the Australian market (15.6x).


Price to Earnings Growth Ratio

PEG Ratio: NCM is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: NCM is overvalued based on its PB Ratio (3.3x) compared to the AU Metals and Mining industry average (1.8x).


Next Steps

Future Growth

How is Newcrest Mining forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NCM's forecast earnings growth (9.2% per year) is above the savings rate (2.3%).

Earnings vs Market: NCM's earnings (9.2% per year) are forecast to grow slower than the Australian market (14.2% per year).

High Growth Earnings: NCM's earnings are forecast to grow, but not significantly.

Revenue vs Market: NCM's revenue (0.6% per year) is forecast to grow slower than the Australian market (4.2% per year).

High Growth Revenue: NCM's revenue (0.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NCM's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has Newcrest Mining performed over the past 5 years?

40.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NCM has high quality earnings.

Growing Profit Margin: NCM's current net profit margins (14.7%) are higher than last year (9.5%).


Past Earnings Growth Analysis

Earnings Trend: NCM has become profitable over the past 5 years, growing earnings by 40.6% per year.

Accelerating Growth: NCM's earnings growth over the past year (64.2%) exceeds its 5-year average (40.6% per year).

Earnings vs Industry: NCM earnings growth over the past year (64.2%) exceeded the Metals and Mining industry -8.4%.


Return on Equity

High ROE: NCM's Return on Equity (7.1%) is considered low.


Next Steps

Financial Health

How is Newcrest Mining's financial position?


Financial Position Analysis

Short Term Liabilities: NCM's short term assets ($1.6B) exceed its short term liabilities ($750.0M).

Long Term Liabilities: NCM's short term assets ($1.6B) do not cover its long term liabilities ($3.5B).


Debt to Equity History and Analysis

Debt Level: NCM's debt to equity ratio (26%) is considered satisfactory.

Reducing Debt: NCM's debt to equity ratio has reduced from 52.7% to 26% over the past 5 years.

Debt Coverage: NCM's debt is well covered by operating cash flow (73.5%).

Interest Coverage: NCM's interest payments on its debt are well covered by EBIT (13.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Newcrest Mining current dividend yield, its reliability and sustainability?

0.97%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NCM's dividend (0.97%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.55%).

High Dividend: NCM's dividend (0.97%) is low compared to the top 25% of dividend payers in the Australian market (6.5%).


Stability and Growth of Payments

Stable Dividend: NCM is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: NCM is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: NCM is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NCM's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure


CEO

Sandeep Biswas (57yo)

6yrs

Tenure

US$6,305,000

Compensation

Mr. Sandeep Biswas, B.E., has been the Managing Director and Chief Executive Officer of Newcrest Mining Limited since July 4, 2014 and has been its Executive Director since joining it on January 01, 2014.  ...


CEO Compensation Analysis

Compensation vs Market: Sandeep's total compensation ($USD6.31M) is above average for companies of similar size in the Australian market ($USD3.99M).

Compensation vs Earnings: Sandeep's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Sandeep Biswas
MD, CEO & Director6yrsUS$6.31m0.064% $17.5m
Gerard Bond
Finance Director8.42yrsUS$2.03m0.019% $5.2m
Philip Stephenson
Chief Operating Officer (Australia & Americas)1.5yrsUS$1.48m0.0092% $2.5m
Suresh Vadnagra
Chief Technical & Projects Officer0.17yrno datano data
Chris Maitland
Head of Investor Relations & Mediano datano datano data
Maria Perez
Chief Legalno datano datano data
Lisa Ali
Chief People & Sustainability Officer0.42yrno datano data
Craig Jones
Chief Operating Officer (Papua New Guinea)1.5yrsUS$1.62mno data
Yoke Moon Lee
Executive Officerno dataUS$1.28mno data
Seil Song
Chief Development Officer0.33yrno datano data
Kim Kerr
Treasurer & Head of Insuranceno datano datano data
Fraser MacCorquodale
General Manager of Explorationno datano datano data

1.5yrs

Average Tenure

52yo

Average Age

Experienced Management: NCM's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Sandeep Biswas
MD, CEO & Director6yrsUS$6.31m0.064% $17.5m
Gerard Bond
Finance Director8.42yrsUS$2.03m0.019% $5.2m
Philip Aiken
Independent Non-Executive Director7.25yrsUS$190.00k0.0023% $614.5k
Peter Tomsett
Independent Non-Executive Director1.83yrsUS$149.00k0.0026% $704.3k
Peter Algernon Hay
Independent Non-Executive Chairman6.5yrsUS$437.00k0.0069% $1.9m
Roger Higgins
Independent Non-Executive Director4.75yrsUS$180.00k0.0017% $456.8k
Vickki McFadden
Independent Non-Executive Director3.75yrsUS$198.00k0.0014% $375.2k
Xiaoling Liu
Independent Non-Executive Director4.83yrsUS$178.00k0.0017% $473.1k

5.7yrs

Average Tenure

63yo

Average Age

Experienced Board: NCM's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.4%.


Top Shareholders

Company Information

Newcrest Mining Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Newcrest Mining Limited
  • Ticker: NCM
  • Exchange: ASX
  • Founded: 1966
  • Industry: Gold
  • Sector: Materials
  • Market Cap: AU$27.192b
  • Shares outstanding: 816.07m
  • Website: https://www.newcrest.com.au

Number of Employees


Location

  • Newcrest Mining Limited
  • 600 St. Kilda Road
  • Level 8
  • Melbourne
  • Victoria
  • 3004
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NCMG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
NCMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
NMADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
NCMSWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFJan 1992
NCMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
NCMG.YOTCPK (Pink Sheets LLC)ADR-EACH CNV INTO 1 ORD NPVUSUSDSep 1995
NMAADB (Deutsche Boerse AG)ADR-EACH CNV INTO 1 ORD NPVDEEURSep 1995

Biography

Newcrest Mining Limited, together with its subsidiaries, engages in the exploration, mine development, mine operation, and sale of gold and gold/copper concentrates. It is also involved in the exploration of silver deposits. The company primarily owns and operates mines and projects located in Cadia and Telfer, Australia; Lihir, Papua New Guinea; Gosowong, Indonesia; British Columbia, Canada; and other projects. Newcrest Mining Limited was founded in 1966 and is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/14 10:33
End of Day Share Price2020/07/14 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.