Sure Dividend originally published this excellent post on gold stocks. We received permission to republish it here. As a head-up, we’re not recommending any direct recommendation for the firms shown here, you should do further research before opening an account.
There are two ways investors can gain exposure to gold.
One way would be to invest in the commodity itself, which can be done either by purchasing physical gold or buying shares in an exchange-traded fund such as the SPDR Gold Trust (GLD), which tracks the price of gold.
The other way to invest in gold is to buy gold stocks. These are companies that explore for and produce gold, or collect income from royalty streams.
While gold stocks are also reliant on the current prices for precious metals, their revenue and cash flow is dependent on other factors as well, such as production rates and quality of assets.
You can download our full list of gold stocks below:
Click here to download your spreadsheet of all Gold Stocks now.
This article examines the investment prospects of the 6 top gold stocks right now, as ranked using expected total returns from the Sure Analysis Research Database.
We rank these 6 gold stocks by our expected total annual returns over the next five years, which is a combination of future earnings-per-share growth, current dividend yield, and the impact of P/E expansion or contraction.
While not all 6 gold stocks are buys, all of them provide exposure to gold, and pay dividends to shareholders.
If gold prices rise in the coming months or years, these 6 gold stocks stand to benefit the most.
Gold Stock #6: Barrick Gold Corp (GOLD)
- Estimated total annual return through 2026: 3.1%
Barrick Gold was founded in 1983 and has since grown into the largest gold mining company in the world.
It has more than 62 million proven ounces of gold, and over 10 billion pounds of proven copper reserves, with operations on four different continents.
The company produces about $12 billion in annual revenue. The current company is the product of a mega–merger between Ranggold and Barrick that occurred in 2019.
Click here to download our most recent Sure Analysis report on GOLD
Top Mining Stock #5: Newmont Mining Corporation (NEM)
- Estimated total annual return through 2026: 6.5%
Newmont Goldcorp Corporation operates gold and copper mines on four different continents. The company was founded in 1916 as a holding company for investments in mineral, oil and gas properties.
Source: Investor Presentation
The company is among the biggest publicly traded gold miners, generating about $12 billion in annual
revenues.
Click here to download our most recent Sure Analysis report on NEM
Top Gold Stock #4: Rio Tinto plc (RIO)
- Estimated total annual return through 2026: 9.9%
Rio Tinto Plc was founded in 1962 and is headquartered in London, the United Kingdom. It is one of the largest precious metals mining companies in the world with a market capitalization of $100 billion.
The company operates in exploration, mining, and production of a variety of minerals. Rio Tinto’s main segments include iron ore, aluminum, and copper, although it is also involved in gold mining.
Click here to download our most recent Sure Analysis report on RIO
Top Gold Stock #3: Franco-Nevada Corp. (FNV)
- Estimated total annual return through 2026: 11.4%
Franco–Nevada Corporation is a royalty and stream company focused on gold and other precious metals, as well as oil and gas.
The company’s cash–flow producing portfolio is actively managed and aims to maintain over 80% of revenue from precious metals.
FNV has raised its dividend for 14 consecutive years, placing it on the Dividend Achievers list.
Source: Investor Presentation
The business model is to grow and build the portfolio of royalties and streams.
The company is still exposed to commodity price fluctuations in the short–term, but utilizes the commodity down cycles to opportunistically make investments.
Click here to download our most recent Sure Analysis report on FNV
Top Gold Stock #2: Gold Resource Corp. (GORO)
- Estimated total annual return through 2026: 12.5%
Gold Resource Corp. is a producer of gold and silver, with operations in two mining units, in Oaxaca (Mexico) and in Nevada.
GORO is a small-cap stock, with a market cap of just ~$150 million. Investors should consider the unique risk factors of small-caps.
Source: Investor Presentation
On February 19th, 2021, Gold Resource spun off its Nevada mining unit into a separately traded stock, Fortitude Gold (FRTT).
This transaction was made to unlock shareholder value, as this mining unit currently has lower production but much higher growth potential than the mining unit in Oaxaca.
Click here to download our most recent Sure Analysis report on GORO
Top Gold Stock #1: Royal Gold Inc. (RGLD)
- Estimated total annual return through 2026: 13.6%
Royal Gold Inc. is a precious metals royalty and streaming company that owns interest in some of the world’s most desirable mines.
The corporation’s main focus is acquiring and managing precious metal stream and royalty interests.
Source: Investor Presentation
Royal Gold has increased its dividend for 20 consecutive years, giving it the longest streak among our top gold stocks.
With over 10 years of annual dividend hikes, Royal Gold is a blue chip stock.
The stock trades for a 2021 P/E ratio of 25, compared with our fair value estimate of 35.
Shareholder returns will be boosted by a rising valuation multiple, expected EPS growth of 5.5%, and the current dividend yield of 1.1%. Overall, total returns are expected to reach 13.6% per year over the next five years.
Click here to download our most recent Sure Analysis report on Royal Gold
Final Thoughts on Gold Stocks
Of the 6 gold stocks on this list, we rate Rio Tinto, Franco-Nevada, Gold Resource Corp. and Royal Gold as buys due to their high expected returns over the next five years.
All 6 gold stocks have positive expected returns, pay dividends to shareholders, and provide exposure to precious metals.
Investors looking to invest in precious metals such as gold and silver can do so by buying ETFs, or by purchasing individual stocks directly such as these 6 gold stocks.
For investors who are bullish on precious metals prices, all of these miners – due to their considerable operational leverage to the price of their mined commodities – are worthy of consideration.
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Neither Tim Thomas nor Timothy Thomas Limited hold positions in the stocks, ETFs, mutual funds, forex, or commodities mentioned.
This article was produced by Sure Dividend and syndicated by Wealthy Living.
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