Why Dundee Precious Metals (DPMLF) Could Beat Earnings Estimates Again: A Strong Buy for Growth Investors

Dundee Precious Metals (DPMLF) has emerged as a compelling investment opportunity for growth-oriented investors, driven by a reinvigorated earnings trajectory, upward revisions to analyst estimates, and technical signals suggesting further upside. Despite industry-wide headwinds like metal price volatility and inflation, the company's operational improvements and disciplined capital allocation are positioning it to outperform expectations. Here's why investors should take notice.

1. Earnings Growth Outpacing Expectations

Dundee's Q2 2025 results demonstrated its ability to deliver surprises, with an earnings per share (EPS) of $0.46, a 17.95% year-over-year (YoY) increase from $0.39 in Q2 2024. This beat the consensus estimate of $0.45, reinforcing its track record of exceeding targets. While the company projects a modest 8.4% decline in annual earnings through 2027, its 2025 EPS growth is still expected to reach 73.1%, outpacing the industry average of 50.6%. This strength stems from:
- Higher production at core mines: Gold output rose at Chelopech (up 7% YoY) and Ada Tepe (up 7% YoY), with further expansions planned.
- Cost management: Sustaining costs at Chelopech fell despite inflation, while by-product credits from copper boosted margins.

2. Analysts Are Raising Estimates

The Zacks Earnings ESP for DPMLF stands at +9.74%, signaling strong consensus optimism about its ability to beat estimates again. This is backed by:
- Upward revisions: Analysts have raised their 2025 EPS forecasts by 15% over the past quarter, reflecting confidence in the company's operational execution.
- Zacks Rank validation: A Zacks Rank of 2 (“Buy”) or better has historically signaled strong earnings momentum, and DPMLF's recent results align with this positive outlook.

3. Dividend Growth and Capital Returns

While the dividend yield of 1.18% (based on a recent stock price of ~$13.50) may seem modest, the quarterly dividend of $0.04 per share represents a 200% increase since Q1 2020, underscoring management's commitment to rewarding shareholders. Additionally, Dundee has repurchased 2.4 million shares in Q2 alone, part of an $116 million buyback program year-to-date. This focus on capital returns, combined with its strong cash flow ($213 million free cash flow YTD 2024), makes it a resilient play in a volatile sector.

4. Technical Indicators Signal a Turnaround

Technically, DPMLF's stock is showing signs of a breakout:
- Price momentum: Shares have risen 22% over the past six months, outperforming broader mining indices.
- RSI support: The Relative Strength Index (RSI) has stabilized above 50 for the past two months, indicating buying pressure.
- Moving averages: The stock is trading above its 200-day moving average, a key bullish signal for long-term investors.

Risks and Considerations

• Metal price volatility: Gold and copper prices remain the company's lifeline, and a sustained downturn could pressure margins.
• Operational risks: Delays at projects like Timok (Serbia) or Loma Larga (Ecuador) could disrupt production timelines.

Conclusion: A Strong Buy for Growth Investors

Despite macroeconomic challenges, Dundee Precious Metals is executing well on its growth levers—production expansion, cost discipline, and shareholder returns—while maintaining a positive earnings surprise trend. With a projected 73% EPS growth in 2025 and technical indicators pointing upward, DPMLF is primed to deliver outsized returns for investors willing to navigate sector-specific risks.

Recommendation: Strong Buy for growth portfolios, with a price target of $16.50–$18.00 over the next 12 months.

Disclosure: The analysis is based on publicly available data and does not constitute financial advice. Always conduct independent research or consult a financial advisor.