Time to Buy the Dip in This Gold Stock?

Kinross Gold stock is down 20% in 2021

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Canadian-based mining stock Kinross Gold Corporation (NYSE:KGC) is down 1.4% to trade at $5.84 today. It's been a rough year for KGC, which sports a 20% year-to-date deficit and fell to an annual low of $5.62 on Aug. 20. With the stock so close to those lows, is there any chance of a rebound?

Unfortunately, there's not a lot of pessimism to be unwound. The majority of analysts rate KGC a "buy" or better, while a slim 1.1% of the stock's total available float is sold short. Moreover, Kinross Gold offers a forward dividend of $0.12 and a dividend yield of 2.03%.

From a fundamental perspective though, Kinross Gold stock is shaping up to be a decent value play. KGC now trades at an extremely attractive price-earnings ratio of 5.81 after its huge drop in price. The mining company has grown revenues 31% since fiscal 2017, only experiencing a decline in annual revenues in fiscal 2018. Kinross Gold's net income has also increased 190% since fiscal 2017, also experiencing a decline in annual net income for fiscal 2018.

KGC has a fairly average balance sheet with $744.3 million in cash and $1.5 billion in total debt. Kinross Gold stock has a price-book value ratio of 1.15, meaning the mining company’s market cap is only 15% higher than KGC's total equity, giving Kinross Gold stock minimal downside risk. Overall, Kinross Gold stock offers a good opportunity for value investors to buy the dip at the moment.

It's also worth noting that KGC ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 19 out of 100. In other words, the security has consistently realized lower volatility than the options pits have priced in, making the equity a potential premium-selling candidate.

 

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