Agnigo Eagle Mines is a Canadian-based gold mining company founded in 1957. Mines are being developed and mined in Canada, Finland, Mexico and the United States. It is divided into 9 mines. LaRonde gold complex, Canadian Malartic mine, Meadowbank Complex, Meliadine mine, Kittila mine, Glodex mine, Pinos Altos mine, Creston Mascota mine, La India mine. The company has been paying dividends every year since 1983. Its share price is strongly influenced by the gold price and is highly volatile.
As you can see, you can see that the stock price moves in a trend similar to the gold price and the volatility is greater than that of gold. If you use gold mining stocks instead of investing directly in gold, you can receive dividends, which is advantageous, but you have to take into account the large volatility. Barrick Gold, invested by Warren Buffett's Berkshire Hathaway, is also Canada's largest gold mining operator. Please refer to portfolio asset allocation.
Its dividend policy is affected by the gold price. During periods when gold prices rise, dividends increase due to an increase in our operating margin, but during periods when gold prices decrease, dividends decrease as margins decrease. Dividends in 2019 increased by about 27% compared to 2018. The current quarter's dividend is $0.2.
This is the operating profit of each mine. Despite the COVID-19 shutdown, solid operating profits continued.
About 97% of our sales come from gold and 3% from silver. The graph on the right is the share of operating profit by mine.
Its income statement and cash flow statement. Its net income and cash flow from operating activities increased on a quarterly basis compared to the same period last year. During the same period, net income increased due to higher gold prices and lower mining and administrative costs, but the increase in net income decreased in part due to a decrease in gold sales and the cessation of mining due to COVID-19. Despite being hit by COVID-19 in the second quarter of 2020, mining production in June returned to the previous year's level.
The figure on the left is AEM, and the figure on the right is the industry average. Its ROE is about 3%, which is very low compared to other industries. The average 5-year EPS growth rate is high at 36.13%. The growth rate seems to have increased as operating margins have improved due to the recent gold price increase. The Quick Ratio is 1.8, which has excellent short-term debt repayment ability, and LT Debt to Equity is about 36.47%, maintaining high financial soundness. Asset turnover is 0.31, dividends are paid quarterly, and the current dividend yield is about 0.5-1%. The dividend growth rate is increasing at around 15%.
Agnico Eagle Mines is a mining company that mines gold, silver, zinc, copper and more, and has been operating for over 50 years. When gold prices rise, our profit margins increase. Gold prices rise in the long run due to scarcity and inflation of gold, which is a finite mineral. However, the price of gold is highly volatile, and the period of the increase in gold price rises in a very short period of around 15% in the history of gold trading, and falls or sideways during the rest of the period. However, the advantage of gold mine owners over real gold investment is that they can receive dividends and are easy to convert into cash. Whenever the gold price drops close to the cost of production, you can use about 5-10% of gold and gold miners for asset allocation.
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