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In the dynamic world of investing, gold stocks have always held a unique allure for investors seeking stability, wealth preservation, and a hedge against market volatility. As we step into 2023, the price of gold remains a focal point, making gold stocks an enticing option for those eyeing the precious metals market. This article dives into gold stocks, exploring the best investment opportunities in gold mining companies, ETFs, and other equities. With insights into the commodity’s price movements, dividend potential, and the ounce-by-ounce performance of gold, investors can confidently navigate the gold market and make informed decisions in pursuit of their financial goals.
Gold often sees a lot of speculative trading, especially in junior gold companies. A smart thing to do is ignore speculation that passes off as investment advice. This article looks at solid gold stocks in America and Canada. These mining shares have stood the test of time and can hold their own in global markets.
Here Are The Top 4 Best Gold Stocks to Invest In July 2023
Top 4 Best Gold Stocks To Buy in July 2023
Barrick Gold
Sometimes, a business is worth buying for its number 2 product. In Barrick Gold’s case, it is copper. This stock has lost almost 7% this year. But we believe it is an outstanding stock to buy thanks to bullish copper forecasts for the year and Barrick Gold’s growing exposure to the metal. Billionaire miner and Ivanhoe Founder Robert Friedland has said that the world could face a situation where copper prices go up tenfold. Since copper is now 18% of Barrick Gold’s revenue, there is significant room for price appreciation. Apart from copper, gold prices soon look bullish, thanks to uncertainty in broader markets. The company is optimistic about production targets for the year too. President and CEO of Barrick Gold, Mark Bristow, said in his March 31, 2023 earnings call, “Our existing mines support a 10-plus year production profile, which our organic growth projects will enhance. Our reserves are constantly replenished by our successful exploration programs, which include exploring worldwide for our next major discovery.”
The stock closed June 29 at $16.63. It has an average price target of $23.34, a potential upside of close to 40%.
Franco-Nevada
Franco-Nevada is a leading player in the gold industry. In the current economic climate, where concerns about monetary policy uncertainties loom large, confidence in the dollar has dwindled, and it is accepted that we are in the middle of a recession, the appeal of investing in precious metals and related assets becomes increasingly evident.
Franco-Nevada boasts a debt-free status and possesses an impressive $2.2 billion in available cash as of March 31, 2023. The company also generated a substantial operating cash flow of $209.8 million during the quarter, affirming its financial strength.
Furthermore, Franco-Nevada has consistently increased its dividends for 16 consecutive periods, underscoring its commitment to providing returns to its shareholders. Currently, the company offers a quarterly dividend of $0.34 per share. It has a 0.99% dividend payout. The growth trajectory of Franco-Nevada is propelled by expansions in existing mines and the development of new mining projects, ensuring a promising five-year growth outlook. Additionally, the company holds long-term potential in gold, copper, and nickel and benefits from exposure to some of the world’s most significant mineral deposits.
The stock closed June 29 at $138.75, with an average target price of $158.16, a potential upside of almost 14%.
Agnico Gold
When you are good, people recognize you. In 2022, Agnico took over Kirkland Lake Gold. Old West Management, an investment management company that was a Kirkland shareholder, welcomed the move. It told its investors in its 2022 letter, “This year, the company [Agnico] is projected to make nearly $1 billion in net income on $5.8 billion in revenue with $758 million of free cash flow. Net income has been growing 15% per year for several years. Agnico has a fortress balance sheet with $1.3 billion of long-term debt, which is only 2 times EBITDA, and $820 million cash in the bank. The stock trades at $55 per share, which is 26 times earnings with a 2.9% dividend yield.” Not much has changed since then, except for the company’s stock price, which has fallen to less than $50. The last four quarters have seen Agnico beat analyst expectations thrice and meet them once. Its current dividend yield is 3.30%.
The stock has an average target price of $67.87, a potential upside of almost 38%. Add the dividend yield of 3.3%, and you could be sitting on a 40% gain at the end of 12 months.
Newmont Corporation
We saved the biggest for the last. Newmont is the biggest gold miner in the world. It has a market capitalization of over $33 billion and a solid dividend payout of 3.77%. It operates in the Americas, Australia, and Africa, mining gold, copper, silver, zinc, and lead. With its recent acquisition of Newcrest Mining Limited, valued at approximately $19 billion, it has added a treasure trove of Tier-1 jurisdiction assets to its portfolio, further solidifying its dominance in the mining sphere. Newmont has effectively positioned itself to capitalize on the anticipated gold price rallies, expecting a $400 million increase in free cash flow for every $100 rise in the gold price. The general market commentary is that gold prices can increase to $2,100 levels from the current $1,920 level. This boost is bound to bolster dividends and enhance credit metrics, leading to an uptick in valuations. In addition, Newmont is poised to reduce its all-in-sustaining cost, setting the stage for healthy EBITDA margin expansion. Hence, with these promising prospects, Newmont presents an exciting opportunity for the astute investor.
The stock closed June 29 at $41.95, and Newmont has an average target price of $78.34, a potential upside of over 86%. It’s an easy buy.
In today’s ever-changing financial landscape, gold is a crucial component that every investor should consider adding to their portfolio. As currencies fluctuate and market uncertainties prevail, gold is a reliable and safe-haven asset, protecting investors against volatile economic conditions. To invest in gold, various avenues are available, including gold ETFs, which provide an easy and diversified way to gain exposure to the precious metal. Additionally, investing in gold miners’ ETFs can be a bullish strategy, as they capture the potential upside of gold prices and the performance of gold mining companies. With global gold reserves amounting to thousands of tonnes and central banks continuing to hold gold as part of their investment strategies, the market capitalization of gold remains substantial. During times of market slump or liquidity concerns, gold investments often outperform other ideas, making them an attractive choice for shareholders. Considering the potential impact of rate hikes and crude sentiment, incorporating gold into one’s investment portfolio provides an essential diversification strategy that can help safeguard wealth and provide stability in an uncertain world.
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