Agnico Eagle Mines Ltd (NYSE: AEM)

Sector: Basic Materials Industry: Gold CIK: 0000002809
Market Cap 106.87 Bn
P/B 4.32
P/E 23.96
P/S 8.98
ROIC (Qtr) 17.59
Div Yield % 0.75
Rev 1y % (Qtr) 60.27
Total Debt (Qtr) 321.47 Mn
Debt/Equity (Qtr) 0.01
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About

Investment thesis

Bull case

  • Strong operating cash flow of 6.82B provides robust 21.21x coverage of total debt 321.47M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.87B provide 94.03x coverage of short-term debt 30.48M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 30.31B provides 94.30x coverage of total debt 321.47M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 6.82B provides exceptional 74.79x coverage of interest expenses 91.14M, showing strong debt service capability.
  • Operating cash flow of 6.82B provides strong 69.89x coverage of stock compensation 97.55M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 6.82B barely covers its investment activities of (2.60B), with a coverage ratio of -2.62, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.60B) provide weak support for R&D spending of 206.68M, which is -12.57x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 6.82B provides thin coverage of dividend payments of (728.08M) with a -9.36 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 2.87B provide limited coverage of acquisition spending of (121.96M), which is -23.50x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 4.38B represents just -4.41x of debt issuance (994.29M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical areas [axis] Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Gold
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AEM Agnico Eagle Mines Ltd 106.87 Bn 23.96 8.98 0.32 Bn
2 NEM NEWMONT Corp /DE/ 100.23 Bn 25.64 9.43 5.65 Bn
3 B Barrick Mining Corp 79.50 Bn 15.92 4.69 4.70 Bn
4 WPM Wheaton Precious Metals Corp. 64.59 Bn 64.49 35.29 0.01 Bn
5 FNV FRANCO NEVADA Corp 48.16 Bn 52.35 31.14 0.00 Bn
6 KGC Kinross Gold Corp 41.29 Bn 23.47 6.41 1.24 Bn
7 PAAS Pan American Silver Corp 20.44 Bn 32.24 6.28 0.86 Bn
8 AGI Alamos Gold Inc 18.08 Bn 33.57 11.23 0.28 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.04 3.33
EV to Cash from Ops. EV/CFO 15.38 -11.32
EV to Debt EV to Debt 326.17 525.64
EV to EBIT EV/EBIT 15.43 17.81
EV to EBITDA EV/EBITDA 12.80 3.39
EV to Free Cash Flow [EV/FCF] EV/FCF 23.92 11.13
EV to Market Cap EV to Market Cap 0.98 1.25
EV to Revenue EV/Rev 8.81 8.35
Price to Book Value [P/B] P/B 4.32 5.92
Price to Earnings [P/E] P/E 23.96 32.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 6.13 1.59
Dividend Payout Ratio % Div Payout % (Qtr) 18.00 5.12
Dividend per Basic Share Div per Share (Qtr) 1.60 0.17
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 18.32 9.95
Interest Coverage Int. cover (Qtr) 74.55 407.12
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -32.65 -96.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 209.36 134.81
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -5.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 128.31 487.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 77.00 54.68
EBIT Growth (1y) % EBIT 1y % (Qtr) 130.47 679.83
EBT Growth (1y) % EBT 1y % (Qtr) 137.60 193.12
EPS Growth (1y) % EPS 1y % (Qtr) 134.56 248.58
FCF Growth (1y) % FCF 1y % (Qtr) 106.14 147.05
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 64.76 84.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.35 0.26
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.03
Cash Ratio Cash Ratio (Qtr) 1.16 3.07
Current Ratio Curr Ratio (Qtr) 2.02 4.82
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.28
Interest Cover Ratio Int Coverage (Qtr) 74.55 407.12
Times Interest Earned Times Interest Earned (Qtr) 74.55 407.12
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 70.90 -19.62
EBIT Margin % EBIT Margin % (Qtr) 57.06 -44.48
EBT Margin % EBT Margin % (Qtr) 56.30 -34.17
Gross Margin % Gross Margin % (Qtr) 71.90 30.57
Net Profit Margin % Net Margin % (Qtr) 37.50 -40.06