When it comes to selecting a stock to buy and hold forever in your Tax-Free Savings Account (TFSA), Barrick Gold (TSX: ABX) stands out as a golden opportunity. So today, we’re not going to beat around the bush. Instead, let’s delve into why this Canadian mining giant deserves a permanent spot in your TFSA.
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The stock
Founded in 1983 and headquartered in Toronto, Barrick Gold has grown into one of the world’s leading gold and copper producers. Now boasting 16 operating sites across 13 countries, it holds a diverse portfolio and a commitment to sustainable mining practices. This has allowed Barrick to solidify its position in the global mining industry.
In the fourth quarter of 2024, Barrick reported net earnings of $996 million, or $0.57 per share, a significant increase from $479 million, or $0.27 per share, in the same period the previous year. Adjusted earnings per share came in at $0.46, surpassing analysts’ expectations of $0.41. This impressive performance was driven by higher gold prices and increased production.
Over the past year, Barrick’s financial performance has been nothing short of stellar. The Canadian stock achieved a 69% increase in net earnings, reaching $2.1 billion – plus a 51% rise in adjusted net earnings to $2.2 billion for 2024. Operating cash flow also saw a 20% uptick, climbing to $4.5 billion. Meanwhile, free cash flow more than doubled to $1.3 billion.
Future outlook
Looking ahead, Barrick has authorized a new $1 billion share buyback program, reflecting confidence in its future prospects. The Canadian stock anticipates gold production between 3.2 million and 3.5 million ounces in 2025. With all-in sustaining costs projected between $1,460 and $1,560 per ounce. Additionally, capital expenditures are forecasted to be between $3.1 billion and $3.6 billion, with copper production expected to range between 200,000 and 230,000 tonnes, driven by higher output at the Lumwana mine.
Barrick continues to reward shareholders with consistent dividends. The Canadian stock declared a quarterly dividend of $0.10 per share for the fourth quarter of 2024, bringing the total annual dividend paid to shareholders to $696 million. This commitment to returning value to shareholders makes Barrick an attractive option for income-focused investors.
Investing in Barrick Gold within your TFSA offers several advantages. The potential for capital appreciation, combined with tax-free growth, allows your investment to compound over time without the drag of taxes. Moreover, the steady dividend income can be reinvested to further enhance your returns – all within the tax-sheltered environment of a TFSA.
A golden opportunity
Gold has long been considered a safe-haven asset, providing a hedge against economic uncertainty and inflation. Barrick’s strong position in the gold mining industry ensures that your investment is backed by tangible assets with intrinsic value, offering stability in volatile markets.
Barrick is dedicated to responsible mining practices, focusing on environmental stewardship, social responsibility, and robust governance. This commitment not only enhances the company’s reputation but also reduces operational risks, contributing to long-term value creation for shareholders. And analysts are on board, maintaining a positive outlook on Barrick’s future, with an average price target of $21.80, suggesting a potential upside of approximately 27.9% from current levels. This optimism reflects confidence in Barrick’s strategic initiatives and growth prospects.
Incorporating Barrick Gold into your TFSA offers a blend of growth potential, income generation, and portfolio diversification. With its strong financial performance, promising outlook, and commitment to sustainability, Barrick Gold shines as a stock worthy of a permanent place in your TFSA.
