As the SPDR Gold Trust ETF (GLD) continues to trade downward as it has during the last three months (roughly 4.25%), there are two gold companies that need to be considered for various reasons. That said, I've established a screen that contains minimum criteria and those requirements are as follows:
- Minimum Profit Margin (P/M) Must Be At Least 30.00%
- Minimum Return On Equity (ROE) Of At Least 8.00%
- Minimum Return On Assets (ROA) Of At Least 5.00%
Goldcorp Inc. (GG): Shares of Goldcorp closed trading at $33.28/share during Thursday's session, making the stock very attractive at current levels. Trading in a 52-week range of $31.54/share (52-week low) and $56.31/share (52-week high), Goldcorp is expected to earn $0.43/share on revenue of $1.37 billion for the second quarter.
There are three reasons why I like Goldcorp at current levels. First, the company has demonstrated profit margins of 31.10% over the last 12 months and also carries a reasonable ROE (8.15%) and ROA (5.38%). Second, the company has either surpassed or has been in-line with earnings estimates in three out of the last four quarters, which, in my opinion, is a pretty reasonable track record. Lastly, Goldcorp pays a dividend (1.7%) ($0.54), though not incredibly high, it still acts as an entry point for the income investor looking for a conservative yield.
IAMGOLD Corporation (IAG) - Shares of Iamgold closed trading at $10.78/share during Thursday's session, making the stock very attractive at current levels. Trading in a 52-week range of $9.20/share (52 week low) and $23.88/share (52-week high), Iamgold is expected to earn $0.22/share on revenue of $397.95 million for the second quarter.
I think Iamgold is attractive for several reasons. First, the company has demonstrated profit margins of 46.44% over the last 12 months and also carries a reasonable ROE (12.57%) and ROA (9.32%). Second, even though the company has missed earnings estimates in each of the last four quarters, it is expected to grow 15.8% for the quarter and 8.3% for the year, which serves a positive catalyst moving forward. Lastly, Iamgold pays an annual dividend (2.4%) ($0.25), though pretty conservative, it still should act as an entry point for the growth investor, who may be looking for a little income.
