Gold is a timeless asset used as a store of value and a hedge against inflation for centuries. The precious metal began increasing in value since the U.S. Federal Reserve started raising the federal funds rate earlier last year. Over the past 12 months, gold prices rose 13.6%. The momentous public equities rally this year partially dented the gold price movement. Despite equities markets radiating confidence, the United States economy is still not out of the woods yet, with inflation still elevated and the economy remaining in a precarious state.
Investors wanting to hedge against a potential downturn should consider buying the best gold stocks.
Royal Gold (RGLD)
Royal Gold (NASDAQ:RGLD) is a unique gold company that does not operate mines but acquires and manages royalties and streams on gold and other metals. That allows Royal Gold to enjoy high margins, low capital expenditures and diversified exposure to different projects and regions.
Despite top-line growth declining in 2022, Royal Gold reported robust margins and operating metrics. The gold company generated $466.9 million in EBITDA at a 78.3% margin while maintaining a net income margin of 40.1%. Moreover, as of June, Royal Gold has a diversified portfolio of 224 royalty and stream interests, of which 32 are producing, 19 are in development and 173 are in evaluation or exploration stages. Some of the company’s key assets include royalties on the Cortez, Penasquito and Mount Milligan mines.
Royal Gold is expected to benefit from the growth and development of its existing portfolio, as well as from potential acquisitions of new royalty and stream interests. Investors desiring to bet on a growing, high-margin platform should consider giving Royal Gold’s shares serious consideration.
Alamos Gold (AGI)
Alamos Gold (NYSE:AGI) is a Canadian-based gold producer that primarily produces income through its four mining operations in the Americas: the Young-Davidson and Island Gold mines in Ontario, Canada, Mulatos mine in Sonora, Mexico, and the Lynn Lake project in Manitoba, Canada.
Despite a slowdown in top-line growth in 2022, Alamos exceeded analyst expectations in 2023. Alamos Gold delivered strong operational and financial performance in both the first and second quarters of this year. In the first quarter, Alamos produced 128,400 ounces of gold, exceeding production guidance, and helped to drive revenues up 36.3% from the prior year. Similarly, second-quarter production also came above guidance in Q2 2023 at 136,000 ounces; top-line growth accelerated 36.5% year-over-year.
Alamos Gold has a strong growth profile, with three low-cost, long-life projects under development: the Quartz Mountain gold project in the United States, the Lynn Lake gold deposit in Canada and a host of new gold development projects in Turkey. Investors began fixing their attention on Alamos’ growth prospects: shares rose 19.4% since the beginning of the year. As the gold producer continues to develop and beat expectations, investors have a lot to be excited about.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) is another gold producer whose shares have performed well this year. Shares rallied 17.8% from the start of the year. That performance stems from a strong performance in the gold producer’s eight mining operations across the Americas, West Africa and Russia.
Kinross Gold reported solid financial results in both the first and second quarters of 2023. First quarter results were successful due — in part — to record production levels in Tasiast, Mauritania — a country in Northwest Africa. The gold producer acquired Tasiast’s gold mining assets in 2010, which have proven valuable as Kinross expanded its production capacity. Likewise, in the second quarter, the gold miner reported a record 555,036 ounces of gold production, primarily driven by gold mining assets in Tasiast and Paracatu, Brazil.
Kinross Gold’s geographic reach has translated into clear advantages for the gold miner and its shareholders. For public equities investors seeking exposure to a company with a wide global reach, Kinross Gold could surely fit the bill.
On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
