What Does AngloGold Ashanti Do?
AngloGold Ashanti Plc, based in the Basic Materials sector, operates within the Gold industry. The company focuses on gold mining and has a significant presence in multiple countries. As of October 2026, AngloGold Ashanti's stock trades at $91.52 per share, with a market capitalization of approximately $46.29 billion. The company has shown a robust revenue compound annual growth rate (CAGR) of 25.18% over the past five years, reflecting strong expansion in its operations.
The Buffett-Framework Verdict
When evaluated through the Buffett-framework, AngloGold Ashanti scores a 70 out of 100, earning an "A" grade. However, the overall verdict remains "unclear." The company boasts an impressive operating margin of 48.1% and a net margin of 31.1%, both significantly exceeding sector averages. Its return on invested capital (ROIC) of 28.5% is well above the sector's top-quintile cutoff.
Despite these strengths, concerns about the company's durability arise from its cyclical industry and earnings volatility. AngloGold Ashanti's 5-year average ROIC of 9.3% falls short of the sector's top-quintile threshold, highlighting potential challenges in sustaining its high returns.
For a deeper analysis, see our Buffett verdict on AngloGold Ashanti.
Valuation and Margin of Safety
AngloGold Ashanti's current price-to-earnings (P/E) ratio stands at 13.60, which appears reasonable given its growth profile and profitability metrics. Analysts have set a target price of $133, suggesting a potential upside. The stock's dividend yield of 3.81% adds an additional layer of appeal for income-focused investors. However, the owner earnings yield of 6.57% is below the preferred range of 8-10%, indicating limited margin of safety.
For more detailed financials, visit the AngloGold Ashanti stock page.
The Bull Case
The bull case for AngloGold Ashanti centers on its strong financial health and operational efficiency. With a net debt/EBITDA ratio of -0.16, the company maintains a net cash position, providing significant financial flexibility. The interest coverage ratio of 26.3 further underscores its ability to manage debt obligations effectively. Moreover, the company's dividend CAGR of 40.66% over recent years highlights its commitment to returning value to shareholders.
The Bear Case
Conversely, the bear case focuses on the inherent risks associated with the gold industry. The company's profitability is heavily influenced by volatile gold prices, which can lead to revenue fluctuations. Additionally, AngloGold Ashanti has not been profitable every year in the past five years, indicating potential earnings instability. The increase in share count at a CAGR of 4.86% suggests dilution, which could impact per-share metrics.
The Bottom Line
AngloGold Ashanti presents a mixed investment case. While its financial metrics are strong and suggest operational excellence, the cyclicality and volatility of the gold industry pose significant risks. Investors should weigh these factors carefully when considering AngloGold Ashanti for their portfolio.
This is educational, not financial advice.