What gold stocks look promising this year?
If you’re looking for the best gold stocks, you’ve come to the right place! The stock market shimmers with plenty of shiny choices. Not all that glitters is gold, though, so we’ll help you pick the truly precious stocks today!
We’ll kick things off with our recommendations for the best gold stocks of 2021. Then, we’ll guide you through investing in this precious metal. An investor like you should know that there’s more to this yellow metal than just gold stocks.
Investing in stocks and precious metals have their different perks and quirks. That’s why we’ll talk about how these assets work, not just our top picks. In turn, you can maximize your returns, perhaps beyond what these gold stocks can generate!
The top gold stocks to buy of 2021
- Barrick Gold Corporation (NYSE: GOLD)
- Kinross Gold Corporation (NYSE: KGC)
- Franco-Nevada Corporation (NYSE: FNV)
#1. Barrick Gold Corporation (NYSE: GOLD)
Barrick’s Q2 2021 Results:
– Guidance maintained from steady performance
– Copper business differentiates $GOLD $ABX from peers
– Cash balance in excess of $5 billion
– Net EPS 23 cents, Adjusted Net EPS 29 cents
+ more: https://t.co/t9pTu81dOa
— Barrick Gold Corporation (@BarrickGold) August 9, 2021
This is a Canada-based gold mining company with numerous sites around the world. These include countries like Saudi Arabia, Zambia, and the Dominican Republic.
Barrick focuses on operating large mines. This allowed the company to produce gold at a steady pace for years. Its annual gold output until 2030 may reach roughly five million ounces.
What’s more, the company expects its sustaining costs will go down in the coming years. This may range from $1,000 per ounce to roughly $800 by 2025.
Barrick should continue to make more money even if gold prices drop slightly. Moreover, it has a strong balance sheet along with a high-quality gold mining portfolio.
The company paid down its debts over the past years. In turn, Barrick has pulled down its interest costs. With its rising financial strength and flexibility, it lets Barrick pay more dividends.
It paid dividends in the first quarter on June 15, 2021. Each share paid $0.09. Barrick investors will get the same amount in the second quarter on September 15, 2021.
As of August 23, 2021, the Barrick (GOLD) stock price is $20.15. Its previous close was at $19.23 on August 20, 2021.
#2. Kinross Gold Corporation (NYSE: KGC)
In 2020, Kinross generated significant benefits by spending more than $3.4 billion in our host countries. Our goal is to maximize the economic value of our business which, in turn, generates social and economic benefits in host countries and communities. pic.twitter.com/heaJNCbTbJ
— Kinross Gold (@kinrossgold) August 17, 2021
This is another one of the companies based in Canada. Similar to Barrick, Kinross also has multiple gold mines across the world. Examples include the Americas, West Africa, and Russia.
Kinross produced over 2.4 million ounces of gold in 2020. In turn, the company was successful in reducing the effects of the pandemic.
In the first quarter of 2021, the Kinross Corporation earned $192.8 million. This was a 15% year-over-year growth in net income. It also produced 558,777 ounces of gold.
What’s more, Kinross reported an 11% growth in revenue from the first quarter of 2020. It totaled $986.5 million. This isn’t the only good news for gold investors, though.
Financial services company Credit Suisse rated KGC for stock outperformance. In other words, it sees Kinross beating the overall market in the future!
It also raised the price target for the Kinross Corporation. Credit Suisse bumped it up from $7.50 to $8.00. This falls in line with the “outperform” rating they gave.
At the time of writing, the price of Kinross (KGC) stock was $5.93. Its previous close was at $5.71. What’s more, it reported a dividend of $0.03 per stock for the second quarter of 2021.
#3. Franco-Nevada Corporation (NYSE: FNV)
Franco-Nevada Chairman Pierre Lassonde tells @hainsworthtv why this chart shows us it’s time to own gold https://t.co/VDpxGpfqyg pic.twitter.com/WjM0yUSds8
— BNN Bloomberg (@BNNBloomberg) November 15, 2016
This one is also based in Canada. Unlike the other two, Franco-Nevada is a royalty and streaming company. So what exactly does it do?
It gives loans to mining companies. In turn, the company receives a portion of the revenue generated by gold mines. This amount is called a royalty, often ranging from 1% to 3%.
This gives it some advantages over gold mining stocks. Just like any investor, it diversifies. In case one company fails, others could still provide a cash flow.
What’s more, a streaming and royalty company may purchase the yellow metal at low prices. This means the company may still profit despite falling gold prices.
The Franco-Nevada Corporation is a prime example. It made a 47% year-over-year growth at $160 million. Also, it made $190 million from the sales of 107,500 ounces of gold.
The FNV stock price at the time of writing was $145.55. This was an increase from $141.43 on August 20, 2021. What’s more, investors can expect a $0.30 dividend per stock in Q2 2021!
What’s the difference between gold stocks and the real thing?
We mentioned that we’d talk more about these two assets. Their purposes are distinct from one another. Understand them so you can choose the best fit for your portfolio.
Gold is one of the oldest investment options. Most people use it to hedge against inflation. That’s because the value of gold usually doesn’t budge despite rising prices for other goods.
That’s great if you want to protect your finances. If you want to profit, gold isn’t the best choice. While gold prices barely go down, they won’t go up that much either.
The opposite is true for gold stocks. You’re investing in companies that can increase their profits. In turn, their stock prices are likely to go up.
It can often beat the precious metal during a bull market! Gold mining stocks are likely to receive a windfall soon. Central banks are buying more gold than ever before.
They’re not even bothered by the current price of gold. As a result, the yellow metal will become more valuable in the future. This means more profits for gold mining companies and investors!
How do I choose the best gold mining stocks?
The market has a lot more gold stocks than our recommendations. Of course, you may find one that we didn’t discuss. For example, there’s the Sibanye Stillwater Limited mining company.
How do you look for these promising stocks, though? Let’s look at how the gold mining companies work again. We’ve already established that there’s high demand for them.
However, many things can disrupt their operations. The best mining companies can minimize these factors. Let’s take a closer look at some of them:
- Production costs – it takes money to make money. Gold mining companies spend huge capital on gold miners, their equipment, and other overhead aspects. If you remember, we mentioned how Barrick reduced its sustaining costs. That’s why we placed it at number one on our list!
- Gold price – Mines earn profit from the demand for gold. This could be a red-hot signal to buy the precious metal! If the prices increase, it may discourage people from buying. Thankfully, central banks continue to buy gold right now, no matter the price.
- Company performance – if the company does poorly, its stock price may tank. You’re placing your trust in a company when you invest in its stocks. You should choose companies that are likely to operate consistently.
Our top picks protect against these risks. Again, you might find better publicly traded companies. See if they meet our criteria. If they do, you might have struck gold!
What are other ways to invest in gold and other assets?
The gold industry provides various investment options. It’s not limited to just bars and stocks. You must learn more about them so you can maximize returns from gold. Here’s the list:
- Bullion – You might be thinking of the shiny bars you see in bank vaults. Contrary to popular belief, bullion has other forms. They only need to meet the minimum requirements for weight and purity.
- Coins – Coins are much easier to store than bulky yellow bars. However, note that gold coins may cost more.
- Jewelry – If you’re a first-time investor, you might want to steer clear. You should be able to figure out a piece of gold jewelry’s authenticity and quality. If you can’t, you’re likely to get scammed by dealers.
- Exchange-traded funds – ETFs are a type of index fund. It’s an asset that invests in multiple stocks. As the name suggests, you may trade it like a stock.
- Mutual funds – Similar to ETFs, it invests in other assets. However, they try to beat market indexes like the S&P 500. They do this by investing in bonds, stocks, and other assets.
The yellow metal isn’t the only asset that glitters. You can choose from so many other alternatives. Let’s explore each one below:
- Bonds – You may consider it as a “glorified IOU.” You lend a company or the government money. Eventually, they pay you back. They’re well-known as safe investments and sources of fixed income.
- Real estate – Properties are still a good investment nowadays. You needed a lot of money to invest back then. Now, real estate crowdfunding lets you do it with just $500!
- Cryptocurrency – Here’s the hottest investment option of the year! These are digital currencies that run on decentralized networks called blockchains. They’re likely to replace gold and even the US dollar!
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Final Thoughts
Now that you know how gold and its stocks work, you may now plan your investments. Research your assets thoroughly. Never use the money you can’t afford to lose!
Were you surprised to know that cryptocurrency may replace gold soon? Then perhaps it’s time to invest in it too! Just like any asset, start with research.
The asset of the future isn’t metal, and it’s digital! You may find quality crypto articles from Inquirer USA. These will explain how cryptos are changing the world.
Learn more about gold stocks
What are gold stocks?
These represent owning a portion of companies that deal with this precious metal. Examples include gold mining firms and royalty companies. You may buy them when their prices are low, then sell them at a higher price. What’s more, they can pay dividends, serving as a source of passive income.
What are the best gold stocks?
Here are our picks for the top gold stocks:
- Barrick Gold Corporation (NYSE: GOLD)
- Kinross Gold Corporation (NYSE: KGC)
- Franco-Nevada Corporation (NYSE: FNV)
We selected these due to their commitment to sustainability. This makes sure they operate consistently, able to serve the growing worldwide demand for gold. Although, you should base your choices on your investment goals and research options by yourself.
Why are they different from physical gold?
You could earn a lot from gold stocks as more people and governments buy more yellow metal. Eventually, these investments could grow in value significantly. On the other hand, gold is well-known as an effective hedge against inflation. This is because the yellow metal tends to keep its value despite market conditions.
Disclaimer: This article is the author’s personal opinion, which may differ from the “official” statements or facts.
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