Shares in S&P/ASX 200 Index (ASX: XJO) gold stock Newmont Corp (ASX: NEM) are outpacing the market today.
In early afternoon trade on Monday, Newmont shares are up 1.8%, changing hands for $64.27 apiece. That's well ahead of the 0.07% gains posted by the ASX 200 at this same time.
Despite the steep slide in the past month, the ASX 200 gold stock has still had a good run over the last 12 months, with shares up 16%.
As you may be aware, Newmont shares only began trading on the ASX on 27 October 2023. That came after the American-based gold mining giant acquired Newcrest Mining in April last year.
So, after the past month's retrace, is now the time to buy Newmont shares?
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Why this ASX 200 gold stock looks attractive
MPC Markets' Jonathan Tacadena is optimistic about the outlook for Newmont shares, with a buy rating on the ASX 200 gold stock (courtesy of The Bull).
The first reason Tacadena is bullish is ongoing global uncertainty.
"Global economic uncertainty typically drives investors towards safe-haven assets like gold," he said.
The second reason is the voracious appetite many central banks have for bullion.
"Central banks, particularly in emerging markets, are increasing their gold reserves as a hedge against economic instability," Tacadena noted.
And the mammoth ASX 200 gold stock has been a beneficiary of rising gold prices, and should do well if the yellow metal continues to march higher.
"Newmont, as the world's largest gold producer, is well positioned to benefit from potentially rising gold prices given its extensive reserve base and global operations," Tacadena said.
At US$2,593 per ounce, the gold price has come down from its recent high of US$2,788 on 30 October. But the yellow metal remains up 31% over 12 months, when that same ounce was fetching US$1,981.
Which brings us to the fourth reason Tacadena has a buy recommendation on Newmont shares.
"The company's strong financial position and dividend policy also make it attractive for investors seeking both growth and income in the gold sector," he said.
Indeed, the ASX 200 gold stock pays out dividends on a quarterly basis.
Over the past 12 months those four payouts total $1.04 a share, unfranked.
This sees Newmon stock trading on an unfranked trailing dividend yield of 1.6%.
As for Newmont's financial position, the ASX 200 gold stock reported a 28% quarter-on-quarter increase in free cash flow for Q3 of US$760 million.
Newmont held cash and cash equivalents of US$3.02 billion as at 30 September.
