NEM vs. KGC: Which Gold Mining Stock is a Better Pick Now?

Core Insights - Newmont Corporation (NEM) and Kinross Gold Corporation (KGC) are significant players in the gold mining industry, with global operations and diversified portfolios. Gold prices, while down from April 2025 highs, remain favorable due to safe-haven demand amid trade and geopolitical uncertainties, currently above $3,300 per ounce [1][2]. Gold Market Dynamics - Gold prices have increased approximately 28$3,500 per ounce on April 22, 2025, amid calls for interest rate cuts [3]. Newmont Corporation (NEM) - Newmont is actively investing in growth projects, including the Tanami Expansion 2 in Australia and the Ahafo North expansion in Ghana, aimed at increasing production capacity and extending mine life [5]. - The acquisition of Newcrest Mining Limited has enhanced Newmont's portfolio, generating $500 million in annual run-rate synergies and creating a multi-decade production profile [6]. - Newmont has divested non-core assets, generating total after-tax cash proceeds of$4.3 billion, which includes $1.7 billion from three assets sold in March 2025 and$850 million from additional sales [7]. - The company reported liquidity of $8.8 billion at the end of Q1 2025, with operating cash flow increasing 162$2 billion [8]. - Newmont returned $1 billion to shareholders through dividends and share repurchases and reduced debt by$1 billion since the beginning of 2025, maintaining a long-term debt-to-capitalization ratio of around 20% [10]. Kinross Gold Corporation (KGC) - Kinross has a strong production profile with key projects like Great Bear in Ontario and Round Mountain Phase X in Nevada, expected to enhance production and cash flow [11]. - Tasiast and Paracatu are the main contributors to Kinross's cash flow, with Tasiast being the lowest-cost asset and achieving record production in 2024 [12]. - Kinross ended Q1 2025 with liquidity of approximately $2.3 billion and generated record free cash flows of around$1.3 billion in 2024 [13]. - The company repaid $800 million of debt in 2024, reducing net debt to around$540 million, with a long-term debt-to-capitalization ratio of 14.4% [14]. Stock Performance and Valuation - Year-to-date, NEM stock has increased by 46.5%, while KGC stock has risen by 66.8%, outperforming the Zacks Mining – Gold industry's increase of 54.4% [15]. - NEM trades at a forward 12-month earnings multiple of 12.59, approximately 10% below the industry average of 14X, while KGC trades at a premium with a multiple of 13.37 [18][20]. - The Zacks Consensus Estimate for NEM's 2025 sales and EPS indicates a year-over-year rise of 2% and 20.1%, respectively, while KGC's estimates imply growth of 15.3% and 63.2% [21][24]. Investment Considerations - Both Newmont and Kinross are well-positioned to benefit from favorable gold prices, demonstrating strong financial performance and commitment to shareholder returns. Newmont is viewed as a more attractive investment due to its valuation and higher dividend yield [25].