SPECIAL REPORT The Top 7 Stocks for 2024

Gold Rush 2023: 3 Mining Stocks Ready to Shine Brighter Than Ever

Advertisement

  • Hedge against inflation with the top gold mining stocks to buy. 
  • Kinross Gold (KGC): Amidst the global GDP growth slowdowns, Kinross flaunts a liquidity cushion of $1.9 billion and potential annualized cash flows of over $2 billion at $2,000/oz gold, complemented by a 2.25% dividend yield.
  • Newmont (NEM): With the market uncertainty, Newmont’s prospects amplify with the Newcrest Mining merger and metrics like a 35% gross profit margin and a hefty 4.8% dividend yield 103% above the sector median.
  • Franco-Nevada (FNV): Diversifying beyond traditional gold mining, Franco-Nevada’s streaming model, coupled with a debt-free balance sheet and $2.3 billion in capital, boasts industry-leading metrics, including a 29.3% levered FCF margin.
gold mining stocks to buy - Gold Rush 2023: 3 Mining Stocks Ready to Shine Brighter Than Ever

Source: Shutterstock

In the ever-evolving financial landscape, gold mining stocks to buy continue to catch the discerning investor’s eye. Gold, with its elusive stature as a sanctuary during economic storms, shines brightly, especially during global unrest or other macroeconomic issues.

The precious metal is not just a counterbalance to equities but stands firm as an inflation hedge and a preserver of value. With recent geopolitical rumbles in the Middle East and a spike in bond yields to a whopping 16-year high, it’s hardly surprising that gold futures hit the impressive $2,000 milestone recently. However, while gold’s allure is undeniable, the practicalities of direct investment can be daunting. For those aiming for a golden opportunity without the tangible burden, delving into gold mining stocks offers an incredible alternative.

Gold Mining Stocks to Buy: Kinross Gold (KGC)

Cellphone with business logo of Canadian mining company Kinross Gold Corp. on screen in front of webpage.
Source: T. Schneider / Shutterstock.com

The forecast for 2024 suggests a likely slowdown in global GDP growth. This backdrop essentially paves the way for anticipated rate cuts, casting a gleaming spotlight on gold. Such a scenario teases a bullish breakout for this precious metal, and Kinross Gold (NYSE:KGC) is well-positioned to ride this golden wave.

Diving into its credentials, Kinross boasts an investment-grade balance sheet fortified by a robust liquidity cushion of $1.9 billion. Moreover, its second quarter report further amplifies its allure with an operating cash flow of $459 million, signaling an annualized cash flow north of $2 billion if gold hits the $2,000 per ounce mark.

Moreover, with a clear vision of gold production until 2025 and cash reserves of $1.9 billion as of the second quarter, Kinross emerges as a fundamentally tantalizing pick. Toss in a compelling dividend yield of 2.25% and a stock trading at a mere 1.6 times forward sales and 4.5 times forward cash flows, and you have an incredibly attractive investment prospect.

Newmont (NEM)

Newmont logo on a mobile phone screen
Source: Piotr Swat/Shutterstock

As global markets flutter with uncertainty, Newmont (NYSE:NEM) shines as a gold beacon for investors, signaling a powerful 2024 breakout rally. This optimism isn’t unfounded; Newmont’s shares experienced a 2.3% uptick post-earnings on the back of the positive sentiment despite the third quarter earnings estimates.

Newmont’s prospects are buzzing over the imminent Newcrest Mining acquisition. The merger isn’t merely an addition of assets but promises strategic synergies that industry experts, like CFRA Research’s Matthew Miller, believe can catalyze per-share growth. While challenges, including the Peñasquito labor strike, have cast a shadow over its third quarter showing, Newmont is swiftly addressing these hurdles, targeting a swift return to productivity. Moreover, Newmont’s stable gold production landscape stretching into the 2040s should have investors salivating over its prospects.

Dive into its current metrics, and you’ll find a trailing twelve-month gross profit margin of 35%, an EBITDA margin of 30.2%, and a levered FCF margin of 4.2%. Additionally, with a dividend yield of 4.8% that towers 103% above the sector median, Newmont positions itself as an investment treasure.

Franco-Nevada (FNV)

Gold bars and Financial concept, studio shots. Costco's gold bars, cost stock
Source: Misunseo / Shutterstock.com

Diversification and strategy typically go hand in hand in the investment realm, and Franco-Nevada (NYSE:FNV) offers both. In the glittering arena of precious metals, Franco-Nevada distinguishes itself not as a miner but as a streamer of streaming resources. While it shares its space with entities such as Wheaton, this company’s portfolio is not exclusively gold-focused, as it embraces other precious metals, casting a protective net for its shareholders.

Franco-Nevada serves as a royalty and streaming firm, injecting capital into mining companies in exchange for gold and other royalty-linked streams. This financial model shields investors from the typical volatility associated with traditional mining companies. At the conclusion of the second quarter, the firm boasted a debt-free balance sheet with an impressive $2.3 billion in ready capital.

Moreover, its profitability metrics underscore Franco-Nevada’s gleaming prospects. Its year-over-year levered FCF margin comfortably leads the industry at 29.3%. Also, a return on common equity of 10.3% only reaffirms the company’s sound financial footing. As investors scout for gold in the stock market, Franco-Nevada stands tall as a purveyor of precious metals and a beacon of strategic investment. If you are looking for gold mining stocks to buy, start here.

On the date of publication, Muslim Farooque did not have (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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/gold-rush-2023-3-mining-stocks-ready-to-shine-brighter-than-ever/.

©2024 InvestorPlace Media, LLC