Investment Game Essay

1868 Words Jan 25th, 2015 8 Pages
Investment Objective
The investment objective for our group is “growth”. We have selected a long-term investment for the intent of wealth building. Growth stocks are intended to appreciate in value, as these companies have historical growth above average earnings, excellent cash flows to service their debts and high operating margins.

Barrick Gold Corp.

Barrick Gold Corp. is the gold industry leader. They have the largest un-hedged gold production and gold reserves in the industry. We chose to invest in Barrick Gold Corp. based on their target for growth, “A” rated balance sheet and their vision for being the best gold mining company through safe, profitable and socially
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On Mar.18th Barrick’s share price fell to $48.87 due to Barrick’s rising capital expenditures of $2 billion. The expenses are a result of higher labour, energy, raw material costs and inflation. Overall, our investment in Barrick Gold Corp. has given us a profit of $672.50 from Feb.2 – Mar.18, 2011.
Financial Ratios

Competitors Ratios

Ratio Comparisons
Barrick Gold Corp. has a higher EPS than its competitors Goldcorp Inc. and Kinross Gold, whose EPS were $2.14 and $0.94 respectively. This means that Barrick Gold Corps’ shareholders earned $3.32 for every common share they owned, an attractive amount that indicates improved profitability over its competitors.
Barrick’s PE ratio is 14.2, less than its competitors which were 19.1 and 17.1. For every dollar of common share earned, Barrick Gold Corp’s shareholder paid less than the investors of Kinross Gold and Goldcorp, making Barrick’s stocks more of a bargain for the time invested.
Barrick has a higher dividend yield than Kinross Gold and Goldcorp Inc. Their yield was 0.93% as compared with the competitors, 0.51% and 0.54%. Barrick’s dividend yield is better as a result of higher earnings.
For each share held by its common shareholders, Barrick’s board of directors declared a dividend payout of 13.25% of earnings for 2010. These shareholders received a higher percentage earnings than the

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