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Kinross Gold Soared 65% in 2016, but It Still Looks Cheap

KGC Price to Free Cash Flow (TTM) Chart

With prices rising as much as 21% last August, gold looked like it was bouncing back last year from the slide that it has endured since 2013. Donald Trump's election put an end to that, though -- from the election to the end of December, the price of gold fell nearly 11%.

In the midst of this volatility, however, shares of Kinross Gold Corporation (NYSE: KGC) , a global leader among gold stocks, climbed more than 65%. Let's dig into the company's performance in 2016, and see what we can expect in 2017.

KGC Price to Free Cash Flow (TTM) Chart

KGC Price to Free Cash Flow (TTM) data by YCharts

But this means little without some context, so let's let's consider it alongside its peers: Barrick Gold, Goldcorp , Kinross Gold, and Newmont Mining . With a free cash flow yield of 9.49%, Kinross Gold far surpasses the competition. Think you'd have to pay a premium for such an attractive yield? Think again. Among its peers, Kinross Gold trades at a cheaper valuation in terms of free cash flow.

KGC Price to Free Cash Flow (TTM) data by YCharts

Over the past three years, investors have had to pay a steep price for Kinross Gold's stock, which has traded as high as 45 times free cash flow. But those days are behind it (for the time being). Overall, considering where shares are trading today, the stock seems quite attractively priced.

The takeaway

Shares of Kinross Gold enjoyed quite the ride in 2016, but there's no guarantee that it will continue flying higher through 2017; nonetheless, the company has some exciting prospects on its horizon. And with the stock looking like a bargain, Kinross Gold represents a serious consideration for investors looking to gain exposure to the gold industry.

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Scott Levine has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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