DB:HAM1

Stock Analysis Report

Harmony Gold Mining

Executive Summary

Harmony Gold Mining Company Limited engages in the exploration, extraction, and processing of gold.

Rewards

Trading at 51.3% below its fair value

Earnings are forecast to grow 45.51% per year

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: HAM1 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.9%

HAM1

1.2%

DE Metals and Mining

1.7%

DE Market


1 Year Return

64.8%

HAM1

-13.5%

DE Metals and Mining

15.0%

DE Market

Return vs Industry: HAM1 exceeded the German Metals and Mining industry which returned -13.5% over the past year.

Return vs Market: HAM1 exceeded the German Market which returned 15% over the past year.


Shareholder returns

HAM1IndustryMarket
7 Day3.9%1.2%1.7%
30 Day-10.0%-4.9%1.4%
90 Day-3.1%-9.5%3.3%
1 Year64.8%64.8%-12.6%-13.5%18.5%15.0%
3 Year10.8%7.4%-42.3%-44.0%17.1%6.9%
5 Year39.4%33.8%-39.2%-42.3%24.3%7.3%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HAM1 (€2.87) is trading below our estimate of fair value (€5.89)

Significantly Below Fair Value: HAM1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HAM1 is unprofitable, so we can't compare its PE Ratio to the Metals and Mining industry average.

PE vs Market: HAM1 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate HAM1's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: HAM1 is good value based on its PB Ratio (1x) compared to the DE Metals and Mining industry average (4x).


Next Steps

Future Growth

How is Harmony Gold Mining forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

45.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HAM1 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: HAM1 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: HAM1's is expected to become profitable in the next 3 years.

Revenue vs Market: HAM1's revenue (5% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: HAM1's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HAM1's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has Harmony Gold Mining performed over the past 5 years?

-4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HAM1 is currently unprofitable.

Growing Profit Margin: HAM1 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: HAM1 is unprofitable, and losses have increased over the past 5 years at a rate of -4.9% per year.

Accelerating Growth: Unable to compare HAM1's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: HAM1 is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (-13%).


Return on Equity

High ROE: HAM1 has a negative Return on Equity (-5.28%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Harmony Gold Mining's financial position?


Financial Position Analysis

Short Term Liabilities: HAM1's short term assets (ZAR5.1B) exceed its short term liabilities (ZAR3.7B).

Long Term Liabilities: HAM1's short term assets (ZAR5.1B) do not cover its long term liabilities (ZAR10.5B).


Debt to Equity History and Analysis

Debt Level: HAM1's debt to equity ratio (23.3%) is considered satisfactory.

Reducing Debt: HAM1's debt to equity ratio has increased from 10.3% to 23.3% over the past 5 years.


Balance Sheet

Inventory Level: HAM1 has a high level of physical assets or inventory.

Debt Coverage by Assets: HAM1's debt is not covered by short term assets (assets are 0.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: HAM1 has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if HAM1 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Harmony Gold Mining's current dividend yield, its reliability and sustainability?

1.09%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%1.3%markettop25%3.6%industryaverage6.5%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate HAM1's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate HAM1's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HAM1's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HAM1's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: HAM1 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HAM1's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

6.2yrs

Average management tenure


CEO

Peter Steenkamp (59yo)

4.1yrs

Tenure

R15,927,000

Compensation

Mr. Peter William Steenkamp, BSc (Engineering) has been the Chief Executive Officer and Executive Director of Harmony Gold Mining Company Limited since January 1, 2016. Mr. Steenkamp served as Executive Di ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD1.07M) is about average for companies of similar size in the German market ($USD1.49M).

Compensation vs Earnings: Peter's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Peter Steenkamp
CEO & Executive Director4.1yrsR15.93m0.095% ZAR1.5m
Frank Abbott
Financial Director & Executive Director8yrsR10.67m0.18% ZAR2.8m
Johannes van Heerden
Chief Executive Officer of South-East Asia12.1yrsR11.44m0.030% ZAR462.8k
Harry Mashego
Executive Director of Stakeholder Relations & Corporate Affairs and Executive Director10yrsR7.74mno data
Beyers Nel
Chief Operating Officer of South Africa Operations3.9yrsR8.96m0.0078% ZAR122.9k
Phillip Tobias
Chief Operating Officer of New Business Development0yrsR8.97m0.031% ZAR489.7k
Tom van den Berg
Executive of Safety & Technology0yrsno datano data
Marian van der Walt
Executive of Corporate & Investor Relations0yrsno datano data
Anton Buthelezi
Executive of Human Resources8.3yrsno datano data
Boipelo Lekubo
Chief Financial Officer0yrsno datano data

6.2yrs

Average Tenure

49.5yo

Average Age

Experienced Management: HAM1's management team is seasoned and experienced (6.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Steenkamp
CEO & Executive Director4.1yrsR15.93m0.095% ZAR1.5m
Frank Abbott
Financial Director & Executive Director8yrsR10.67m0.18% ZAR2.8m
Harry Mashego
Executive Director of Stakeholder Relations & Corporate Affairs and Executive Director10yrsR7.74mno data
D. S. Lushaba
Independent Non-Executive Director17.3yrsR1.15mno data
Max Sisulu
Independent Non-Executive Director2.1yrsR508.00kno data
Patrice Motsepe
Non-Executive Chairman of the Board16.4yrsR1.37mno data
Modise M. Motloba
Independent Non-Executive Deputy Chairman7.5yrsR1.41mno data
Fikile Felicity De Buck
Independent Non-Executive Director13.9yrsR1.49mno data
Mavuso Msimang
Lead Independent Director1.8yrsR960.00kno data
Vishnu Pillay
Independent Non-Executive Director6.8yrsR1.10mno data

7.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: HAM1's board of directors are considered experienced (7.8 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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.5%.


Top Shareholders

Company Information

Harmony Gold Mining Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Harmony Gold Mining Company Limited
  • Ticker: HAM1
  • Exchange: DB
  • Founded: 1950
  • Industry: Gold
  • Sector: Materials
  • Market Cap: R25.276b
  • Listing Market Cap: R1.566b
  • Shares outstanding: 541.47m
  • Website: https://www.harmony.co.za

Number of Employees


Location

  • Harmony Gold Mining Company Limited
  • Randfontein Office park
  • Corner of Main Reef Road and Ward Avenue
  • Randfontein
  • Gauteng
  • 1759
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HGMC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1975
HARJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJan 1975
HAM1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1975
HMYNYSE (New York Stock Exchange)SPONSORED ADRUSUSDJun 1990
HAMDB (Deutsche Boerse AG)SPONSORED ADRDEEURJun 1990

Biography

Harmony Gold Mining Company Limited engages in the exploration, extraction, and processing of gold. The company also explores for uranium, silver, and copper deposits. It has nine underground operations; an open-pit mine; and various surface treatment operations in South Africa. The company owns interests in the Hidden Valley, an open-pit gold and silver mine; and the Wafi-Golpu, a gold-copper project in Morobe Province. Harmony Gold Mining Company Limited was incorporated in 1950 and is headquartered in Randfontein, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/15 21:40
End of Day Share Price2020/02/14 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.