3 Mining Stocks That Can Extract Long-Term Gains for Savvy Investors


  • Dive into these mining stocks to buy.
  • Newmont (NEM): Newmont’s prior volatility could spell opportunity moving forward.
  • Royal Gold (RGLD): Royal Gold’s royalty and streaming businesses offer better pricing predictability.
  • Sibanye Stillwater (SBSW): Sibanye Stillwater’s palladium unit is overlooked.
Mining Stocks to Buy - 3 Mining Stocks That Can Extract Long-Term Gains for Savvy Investors

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On the surface, the case for mining stocks to buy might not seem particularly encouraging. Just consider what the Federal Reserve had to say.

Chairman Jerome Powell acknowledged what we’ve already felt. Inflation has been persistently sticky – indeed, stickier than anticipated. As a result, Fed officials are “prepared to maintain the current target range for the federal funds rate for as long as appropriate.” That doesn’t sound inviting for mining stocks to buy and it’s not, let’s just keep it real.

However, monetary policy alone doesn’t determine consumer prices. Right now, factors such as a robust labor market and geopolitical flashpoints have arguably represented the core catalysts. And these catalysts might not fade so soon. Therefore, speculators should target these mining stocks to buy.

Newmont (NEM)

Newmont logo on a mobile phone screen
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Sector giant Newmont (NYSE:NEM) reliably offers a long-term case for mining stocks to buy. Yes, it incurred significant volatility and choppiness compared to its ilk. Still, we’re talking about a company that enjoys a return on invested capital (ROIC) of 3.59%. That’s above 86.78% of players in the metals and mining ecosystem.

For the current fiscal year, analysts are looking for earnings per share of $3.24. That’s well above last year’s deflated print of $2.20. Notably, the most optimistic target calls for $4.15. On the top line, they’re seeking revenue of $23.69 billion, with a high-side estimate of $25.11 billion. In 2023, Newmont posted only $16.14 billion in revenue.

Presently, NEM stock trades hands at 2.87X trailing-year sales. That’s elevated compared to the industry median of 1.63X. However, back in the first quarter of 2023, the multiple had run up to 3.27X. So, on a relative basis, NEM appears discounted.

Further, if inflation worsens – and that is what the Fed is concerned about – metals should rise. Cynically, that’s good for Newmont stock.

Royal Gold (RGLD)

An image of multiple gold bars. Gold prices
Source: Shutterstock

A royalty and streaming enterprise, Royal Gold (NASDAQ:GOLD) isn’t directly involved in extracting natural resources from the earth. Instead, it offers upfront capital to miners. In return, Royal takes either a cut of the revenue (royalty) or the physical production (streaming). It’s a very profitable business, with the company enjoying a net margin of almost 40% Thus, it’s one of the top mining stocks to buy.

For the current fiscal year, covering experts anticipate EPS to reach $4.33. That’s a sizable gain from last year’s result of $3.53. Also, it’s worth mentioning that the high-side estimate calls for earnings of $5.07 per share. On the top line, analysts are hoping for sales of $693.91 million. That’s up 14.6% from 2023’s haul of $605.72 million.

Now, it must be stated that RGLD is priced sky high in terms of trailing revenue – we’re talking 13X. However, this is a relative discount from Q1 2023’s multiple, when the metric jumped to 14.12X. Overall, the royalty and streaming business models should provide predictability during a wild time in the sector.

Sibanye Stillwater (SBSW)

Person holding smartphone with logo of South African mining company Sibanye Stillwater Limited on screen in front of website. Focus on phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

Easily the riskiest idea among mining stocks to buy, Sibanye Stillwater (NYSE:SBSW) happens to be my favorite at the moment. That’s because the company isn’t just relevant in terms of an indirect inflation hedge. Yes, Sibanye mines gold but it also mines the platinum group metals. Among them, palladium stands out as a core asset because it’s used in catalytic converters.

Recently, electric vehicle sales have plunged while hybrid vehicles have soared. Hybrids utilize a combustion engine and therefore require catalytic converters. That means more palladium demand needs to be baked into the current SBSW stock price. However, I’m not entirely sure that the market respects this narrative. Since the start of the year, SBSW lost more than 13% of equity value.

No matter, what’s really intriguing right now is that Sibanye trades at only 0.53X trailing-year revenue. As Gurufocus pointed out, that could be a sign of a value trap. Maybe – but I don’t think so. If hybrid sales continue to rise (and that’s the trajectory), palladium demand should swing up too.

It’s a risky idea, yes, but SBSW stock is one of the top speculative mining stocks to buy.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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