Daily Stock Pick: Anglo American

This week, I'm looking for the fourth materials sector representative of nine for my Ivy portfolio.

That materials sector has thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; gold; paper; silver; specialty chemicals; steel.

Today I'm reviewing large-cap industrial metals and minerals company, named Anglo American Plc. Its trading ticker symbol is AAUKF. I last reported on AAUKF on July 27, 2018.

Anglo American's mining portfolio spans many commodities and continents. Like fellow large diversified miners, Anglo has significant exposure to copper, coal, and iron ore, but it is unique in its significant platinum output. The company accounts for about one-third of the world's platinum supply and just over 20% of palladium supply. Anglo also owns 85% of De Beers, in most years the world's largest supplier and marketer of rough gem diamonds.

Anglo American plc was founded in 1917 and is headquartered in London, the United Kingdom

I use three key data points to gauge the value of any dividend equity like metals and minerals company, named Anglo American plc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

AAUKF Price

Anglo's price per share closed at $25.51 Friday. A year ago its price was $24.96. Price rose $0.55 or 2.2% in the past year.

Assuming Anglo's stock trades in the range of $20 to $28 this year, Anglo's recent $25.51 price could rise by $1.49 and go to $27.00 by early-March, 2020.

AAUKF Dividends

Anglo's most recentSemi-Annual dividend was $0.51 declared February 21st and payable May 3rd.

That $0.51 Q dividend equates to a $1.02 annual payout and a yield of 4% at Friday's $25.51 closing price.

Gains For AAUKF?

Adding the $1.02 annual estimated dividend to my $1.49  estimate of Anglo's estimated price upside shows a $2.51 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we put a little under $1,000.00 today at the $25.51 recent stock price would buy us 39 Anglo American plc shares.

A $10 broker fee paid half at purchase and half at sale costs $0.26 per share.

Subtract that $0.26 brokerage cost from the estimated $2.51 gross annual gain leaves a net gain of $2.25 X 39 shares

= $87.75 or 8.8% net gain on a $994.89 investment.

Therefore, Anglo American plc whose trading ticker symbol is AAUKF now shows a possible net gain of 8.8% including a 4% dividend yield.

No brokers cover this stock:

So I get no backing or back talk on my estimate.

Therefore, you can look at Anglo American plc and see it has made money, is making money, and could throw a net gain of 8.8% including a 4% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Anglo American plc is worth your time and money.

Disclaimer: 

 

more

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.