ZACKS·2025-07-30 12:40Core Insights - Harmony Gold Mining Co. Ltd. (HMY) and Gold Fields Limited (GFI) are benefiting from a surge in gold prices, currently above $3,300 per ounce, driven by global economic uncertainties and investor demand for safe-haven assets [1][2] - Gold prices have increased approximately 27% this year, with central banks accumulating gold reserves amid geopolitical tensions and trade policy changes [2] - A comparison of HMY and GFI is relevant for investors looking for exposure in the precious metals sector [1] Harmony Gold Mining Co. Ltd. (HMY) - HMY is South Africa's largest gold producer by volume, with production of approximately 1.56 million ounces in fiscal 2024 [4] - The Wafi-Golpu project in Papua New Guinea has an estimated gold reserve of 13 million ounces and is seen as a potential game-changer for HMY [5] - The Eva Copper project in Australia, acquired in 2022, is expected to produce 55,000-60,000 tons of copper annually and is part of HMY's strategy to transition into a low-cost gold and copper mining company [6] - HMY's net cash increased by about 53% to $592 million at the end of Q3 fiscal 2025 [7] - HMY has a dividend policy to pay 20% of net free cash generated, with a current dividend yield of 1.4% and a five-year annualized dividend growth rate of approximately 19.4% [8] Gold Fields Limited (GFI) - GFI's gold production increased roughly 19% year-over-year to 551,000 ounces in Q1 2025, with a production guidance of 2.25-2.45 million ounces for the year [10] - The acquisition of Osisko Mining in October 2024 strengthens GFI's portfolio and expands its presence in Quebec [11] - GFI's Windfall project in Quebec targets an annual production of 300,000 ounces of gold [12] - GFI's net debt decreased to $1,981 million at the end of Q1 2025, and it offers a dividend yield of 2.5% with a five-year annualized dividend growth rate of about 17.3% [15] Valuation and Performance - Year-to-date, HMY stock has increased by 71%, while GFI stock has risen by 91.8%, outperforming the Zacks Mining – Gold industry's increase of 55.4% [16] - HMY trades at a forward earnings multiple of 4.93, representing a 60% discount compared to the industry average of 12.4 [17] - GFI trades at a forward earnings multiple of 8.74, which is below the industry average [19] - The Zacks Consensus Estimate for HMY's 2025 EPS implies a year-over-year rise of 190.8%, while GFI's EPS growth is estimated at 93.9% [20][24] Investment Considerations - Both HMY and GFI are well-positioned to capitalize on the current gold price environment, with HMY appearing to have a more attractive valuation and stronger growth projections [26]