Gold mining stocks: Best Gold Stocks for 2023 The Motley Fool
Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers. A widely accepted value metric is theprice-to-earnings (P/E) ratio. Because gold stocks closely follow the commodity’s price, the sector also provides a partial hedge against inflation, helping to diversify a “risk-on” equity portfolio. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers. A widely accepted value metric is price-to-earnings (P/E) ratio.
Franco-Nevada’s streaming and royalty contracts provide it with the ability to generate lots of cash by selling the physical commodities it receives. That cash flow enables it to invest in new deals and pay a dividend. In its Q4 and full-year 2022 results, Freeport-McMoRan states that long-term mine development activities are underway at Grasberg’s Kucing Liar deposit. The company anticipates that the deposit will ultimately produce more than 6 billion pounds of copper and 6 million ounces of gold (or 170.1 MT) between 2028 and the end of 2041. In 2022, Kinross produced 68.4 MT of gold, which was a 35 percent year-on-year increase from its 2021 production level.
Agnico Eagle Mines (TSX:AEM,NYSE:AEM)
Get the most updated comparison by key indicators and discover each stock’s price target, as well as recommendations by top Wall Street experts. Many factors affect the price of gold, including monetary policy and inflation. For years, gold was the top choice of investors seeking to hedge against these risks. However, cryptocurrencies could cause gold and other precious metals to lose their luster, an emerging risk that investors need to monitor.
Technical analysis of stocks and trends is the study of historical market data, including price and volume, to predict future market behavior. In addition, other investors seeking to benefit from the stock’s outperformance will often purchase it, further bidding its price higher. These are the stocks that had the highest total return over the past 12 months. That strength was reflected in some of the precious metal sector’s stocks.
Investors who own gold stocks aim to benefit from changes in the price of gold without having to own or store physical gold themselves. That aside, one of the best ways to invest in the gold market is through gold mining companies. They benefit from rising gold prices, as well as their ability to increase production and reduce costs. Consequently, top gold mining companies can often outperform the price of gold. The top-tier gold miners have low cost structures, manageable debt levels, and limited exposure to risky mining projects.
An alternative investment is a financial asset that does not fall into one of the conventional investment categories. “Yamana Announces Termination of the Gold Fields Transaction and Confirms Activation of the Agnico-Pan American Arrangement Agreement.” Subsequently, shares of the small miner more than doubled over the next several months.
A forward P/E ratio of 19.5 is reflective of the stock’s position within its range. P/E values have ranged between three and over 100 within the last five years. The high solvency ratio means the company has more than enough cash flow to cover its debts. But few would deny that the yellow metal plays a unique role in markets, offering a store of value that is unlike almost any other asset.
Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher. Every investment has advantages and disadvantages—gold stocks are no different. It’s recommended that investors interested in purchasing gold stocks do their own due diligence and consult with a financial advisor before making a decision. The goal of purchasing any stock is to buy low and sell high. Do your due diligence, consult with a financial advisor and decide when the time is right for you to purchase gold stocks.
Franco-Nevada is a Canada-based streaming and royalty company. It has a diversified portfolio, with agreements tied to gold, silver, the platinum group metals , iron ore, and oil and gas. Typically, a strong U.S. dollar means weaker gold prices as demand for the precious metal eases from buyers using foreign currencies. Conversely, demand increases when the greenback loses value, making gold cheaper for offshore buyers. Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole.
According to the most recent US Geological Survey data, gold production increased by approximately 2 percent in 2021, and by a mere 0.32 percent in 2022. China, Australia and Russia were the top three countries to produce gold last year. In 2021, it produced more than 1 million gold-equivalent ounces. Gold equivalent production for the year was 88% of the company’s total production, and silver was 12%. These are the gold stocks that had the highest total return over the last 12 months. The company forecasted gold production of 3.2 million to 3.4 million ounces in 2022.
The NYSE Arca Gold BUGS Index, also known as the HUI Gold Index, is an index of publicly-traded gold-mining companies useful for tracking gold prices. Key advantages of holding gold stocks include leveraged upside and liquidity. On Nov. 8, Yamana agreed to an arrangement under which Pan American Silver Corp. will acquire all of the company’s issued and outstanding shares.
Impact of the U.S. Dollar on Gold Stocks
Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy. Full BioNathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016. Gold mining is the practice of extracting gold ore from the earth and processing it into gold bullion.
Dundee Precious Metals Inc. (DPM.TO)
Gold streaming is the provision of upfront financing to gold miners in exchange for the option to buy finished gold bullion at a discount in the future. Dividend payments commenced in 2021, and the company raised the dividend in 2022. FNV has increased earnings every year since 2018 and has increased sales each year for more than a decade. The ability to produce more than 500,000 ounces of gold per year. The right to purchase the future production of a specific metal at a certain mine for a fixed price, e.g., a mining stream.
The ETF also has a reasonable expense ratio of 0.51%, making it a relatively cost-effective way to invest in many gold stocks. The Australian company operates a total of five mines across Australia, Papua New Guinea and Canada. Its Lihir gold mine in Papua New Guinea is the world’s seventh largest gold mine by production. In 2022, the company increased its gold production by 11 percent over 2021, coming in at the top end of its guidance for the year. Its production guidance for 2023 is set at 2.45 million to 2.61 million ounces (69.46 to 74 MT). In its annual report for 2022, Barrick notes that its full-year gold production was slightly less than its stated guidance for the year, rising a little over 7 percent from the previous year’s level.
Whether you choose to buy physical gold or gold stocks depends upon your own goals and requirements. If you’re looking to hold gold stocks in your portfolio over the long term, you should be mindful of the industry’s volatile nature. Gold is a cyclical commodity, and companies in the industry also tend to generate cyclical results. Their profits rise when gold prices are high and decline when gold is cheap.
Kinross Gold has six mining operations across the Americas and East Africa . Its largest producing mines are the Tasiast gold mine in Mauritania and the Paracatu gold mine in Brazil. The company’s production guidance for 2023 is in the range of 2.25 million to 2.3 million ounces (or 63.79 to 65.2 MT). This figure excludes production from Gold Fields’ Asanko joint venture in Ghana.
Go to the Stock Comparison tool to compare more stocks on key indicators. Stock prices are delayed, the delay can range from a few minutes to several hours. Data from Refinitiv shows that Newmont, Barrick Gold and Agnico Eagle took the top three spots. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.