Gold has rallied to record highs, hitting $2,350 per ounce after testing investor patience. A shift toward bullish sentiment is clearly prompting a closer look at gold stocks (and particularly gold miners). Investors look for steady places to hide out, in the event volatility spikes with what many believe could be an incoming downturn.
Bitcoin (BTC-USD) is another safe haven asset that’s seen strong buying activity this year, for this reason and others. With the Bitcoin halving now behind us, and the world’s largest cryptocurrency seemingly headed back above the $66,000 threshold, enthusiasm surrounds this asset. Given its performance over the past year, long-term holders continue to keep steady positions.
Interestingly, gold’s outperformance over Bitcoin in recent weeks has some investors considering whether a rotation toward a time-tested store of value may be a better bet. For investors looking to gain exposure from a continuing rally in gold, three gold miners are worthy of consideration.
Agnico Eagle Mines (AEM)
As one of the most prominent players in the gold mining sector, Agnico Eagle Mines (NYSE:AEM) is proud of its $31 billion market cap. In its recent earning report, the company showed strong growth, with revenue increasing nearly 27% year-over-year (YOY). This move was driven by higher gold prices. But the recent peak in gold wasn’t reflected in these numbers. Forward estimates are increasing, as investors price in even better numbers in the coming quarters.
AEM’s earnings are trending higher, and the company’s margins should expand dramatically, should these higher gold price levels hold. The company remains a top option for investors seeking dividends in this space, with a current yield of 2.5% supported by strong cash flows. Notably, the company reported a 10.5% increase in its gold reserves, now at 53.8 million ounces. So, there’s plenty of upside ahead for this miner in a rising gold price environment.
Agnico Eagle Mines reported liabilities of $1.05 billion due within a year and $8.21 billion due beyond that, outweighing its cash and receivables. With a market capitalization of $31 billion, it could raise funds if needed. However, scrutiny is required to assess its debt management capability, considering debt relative to earnings.
As the company has been surpassing estimates in recent quarter reports, the last quarter exceeded expectations with 57 cents per share. Analysts are positive on AEM stock, with many looking forward to its earnings report release on the 25th of April.
Barrick Gold (GOLD)
Toronto-based mining company Barrick Gold (NYSE:GOLD) is known for developing the mineral properties of copper and gold. With operations in Canada, Argentina, the U.S. and other countries, Barrick Gold also produces silver and other energy-related materials.
Despite a 4% share dip this year, GOLD’s recent performance has been strong. The stock surged 10% following the company’s release of its Q4 earnings, which exceeded expectations. Also, this report highlighted a $1 billion share buyback program and a 10 cent per share dividend. Free cash flow surged by 50% to $646 million, indicating the kind of fundamental growth long-term investors want to see.
The company projects earnings of 19 cents per share in the present quarter, marking a 35.7% YOY increase, with an estimated full-year earnings per share of $0.90. Analysts collectively hold a moderate buy stance on GOLD stock. In my view, this stock should be more of a strong buy, considering its size and prevalence in this sector.
Newmont Mining (NEM)
Another leading player in the gold mining sector, Newmont Mining (NYSE:NEM) is not one to miss. Importantly, NEM stock has seen a recent surge despite underperforming last year. The company’s earnings per share are anticipated to be $2.68, with a revenue increase of $22.05 billion and a forward annual dividend yield of 2.52%. NEM is another attractive option among gold stocks for investors looking for income-generating assets in this sector.
Last month, the company initiated the sale of its Akyem gold mine in Ghana, attracting interest from Chinese producers. Citigroup oversees the sale, and potential buyers, including Shandong Gold Mining and Zijin Mining Group, have shown interest. Chifeng Jilong Gold Mining and Perseus Mining are also evaluating the opportunity.
Positioned for EBITDA margin expansion and steady gold production growth, Newmont Mining’s investment-grade balance sheet offers flexibility for aggressive investments. Forecasting 6.9 million gold ounces for the year, the company anticipates healthy dividend growth as cash flows rise.
On the date of publication, Chris MacDonald 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.