Stocks to buy

As a refuge for traders seeking to reduce risks, such as political turmoil, and financial crises, gold is a good investment. However, because of these reasons, the price of gold may fluctuate. Accordingly, the price of various gold miners will also likely see significant volatility from here.

That said, buying gold miners rather than physical metal offers various advantages for investors. In fact, gold mining companies have the potential to generate higher returns than a direct investment in physical gold by increasing their production and minimizing expenses. Better, these factors can aid in boosting the profits of gold companies, resulting in higher stock prices due to the rise in earnings, which can outpace the growth rate of the cost of gold itself. With numerous companies dedicated to gold mining, investors have many choices when investing in gold. Below are some of the most promising gold stocks to consider buying in 2023.

AEM Agnico Eagle Mines $60.40
GOLD Barrick Gold $20.43
NEM Newmont Corporation $49.41

Gold Miners: Agnico Eagle Mines (AEM)

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Despite a challenging cost and workforce environment, Agnico Eagle Mines (NYSE:AEM) emerged as a leading gold producer in the past year, thanks to its exceptional cost control measures and record margins. In addition, the company continued to make progress in expanding its mineral resources and consolidating its position in the most profitable mining jurisdictions.

In addition, Toronto-based Agnico Eagle Mines is a gold producer in Mexico, Finland, and Canada, with exploration and development activities in the United States. Although the company has a greater risk level than other gold equities, its equity valuation has decreased by approximately 2% from the beginning of Jan. 

Also, data from Bloomberg revealed that the average rating of Agnico Eagle Mines shares is a “moderate buy,” with an average target price valuation of US$70.50. Moving forward, it will be intriguing to observe how Agnico Eagle Mines handles its finances and stock performance amidst prolonged market volatility, fierce competition, and a commitment to satisfying shareholder interests through innovative value creation in core business areas under the guidance of effective leadership.

Barrick Gold (GOLD)

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Over the past five years, Barrick Gold (NYSE:GOLD) has emerged as one of the most profitable businesses in its sector, with EBITDA margins of nearly 50%. Despite a challenging 2022, its profitability metrics remained relatively consistent with its historical averages.

Barrick Gold’s asset base is another advantage, with the company holding 76 million ounces in gold reserves as of the end of 2022. The company’s robust financial flexibility also provides clear cash flow visibility for the foreseeable future. The company’s copper mining division is another significant opportunity, accounting for 18% of its revenues. This figure could rise significantly in the coming years as several long-term projects are being developed.

In addition, the partnership between Barrick and Newmont in the Nevada Gold Mines joint venture is viewed as a game-changer that could result in substantial gains for both organizations. With an impressive gross profit margin of 39%, Barrick has already established a solid market presence.

Newmont Corporation (NEM)

Source: Alexander Limbach / Shutterstock

Newmont Corporation (NYSE:NEM), with a market capitalization of over $41 billion, is currently the largest gold company by market value. Given the current upward trend in gold prices, Newmont’s stock is worth watching.

Since Nov., the value of gold has steadily been rising, reaching a value of over $2,000 per oz after several turning points. Recent banking failures have further bolstered the perception of gold as a safe store of value, leading to increased attention on Newmont Corporation as a gold mining stock. To invest in gold without buying the physical metal, high-quality gold mining stocks are a great option. Newmont Corporation is appealing, with a forward price-earnings ratio of 21.1 and a competitive dividend yield of 3.36%.

Newmont Corporation boasts a solid balance sheet with an investment-grade rating and a healthy liquidity cushion of $6.7 billion. Given this, many investors anticipate the company to pursue growth through organic and acquisition strategies. Newmont has guided 6 million ounces of annual gold production through 2032, offering a clear line of sight to create value for its shareholders.

On the date of publication, Chris MacDonald has a position in Agnico Eagle. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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