Although the immediate print suggests that safe havens might not be necessary, investors will probably still want to keep tabs on top gold stocks. Fundamentally, while the unexpectedly strong jobs report for November tempered hopes that the Federal Reserve will implement interest rate cuts earlier, the economy still presents an ambiguous backdrop.
For one thing, a recent Reuters report suggests that the central bank could start cutting rates around May next year. That seems an aggressive goal considering that inflation remains stubbornly elevated from pre-pandemic norms. Nevertheless, it the Fed decides to cut rates, inflation could once again skyrocket, sending the best gold stocks higher.
Now, if that scenario doesn’t materialize, safe havens may still have their place in the sun. One subtle indicator that not all is well stems from the sales of Swiss luxury watches. With more affluent consumers deciding to cut back on their discretionary purchases, that may be a sign that the fear trade could eventually take centerstage.
If so, you’ll be glad to have these top gold stocks.
Newmont (NEM)
An American gold mining firm, Newmont (NYSE:NEM) is the world’s largest corporation of its kind. Per its public profile, it owns precious metal mines domestically and throughout the globe, including countries such as Argentina, Ghana, and Australia. While traditionally one of the safe havens in terms of mining enterprises, it lost a significant amount of value since the start of the year.
Admittedly, that’s a distracting narrative. However, in the trailing month, NEM gained over 15% of equity value, demonstrating renewed interest in gold stocks. For Newmont, the company will likely march forward on its solid trailing-year operating margin of 9.93%. That’s noticeably above the sector median value of 1.89%.
And while Newmont suffered a big hit in the bottom line last year, it still offers a forward dividend yield of 4.09%. That’s above the materials sector’s average yield of 2.82%. In addition, NEM carries a moderate buy view among analysts with a $48.67 average price target, implying almost 25% upside.
Barrick Gold (GOLD)
An established player among top gold stocks, Barrick Gold (NYSE:GOLD) offers a solid example of publicly traded safe havens. According to its public profile, Barrick produces gold and copper with 16 operating sites in 13 countries. As with Newmont above, the company features a diverse mining portfolio, with projects located in Canada, Zambia and Saudi Arabia.
To be sure, one blemish focuses on its market performance. Since the start of the year, GOLD stock slipped about 6%. However, in the past 30 days, the equity unit swung up about 10%, aligning with broader rejuvenated sentiment in the gold ecosystem. Financially, one of Barrick’s main attributes is its trailing-year operating margin. At 23.42%, it stands well above the sector median of 1.89%.
Regarding passive income, Barrick carries a forward yield of 2.38%. While it’s not the most generous yield, the payout ratio sits at 36.59%, thus reflecting a sustainable profile. Combined with a moderate buy assessment calling for a price target of $20.73 (up over 23%), GOLD ranks among the best gold stocks.
Franco-Nevada (FNV)
Based in Toronto, Ontario, Canada, Franco-Nevada (NYSE:FNV) is a gold-focused royalty and streaming company with a diversified portfolio of cash-flow producing assets. Royalty companies don’t mine commodities. Instead, they offer mining enterprises upfront cash in exchange for a pre-determined cut of the revenue. In that way, FNV ranks among safe havens because of higher business predictability in an often-volatile industry.
Nevertheless, pre-determined contractual agreements don’t always guarantee a smooth ride in the price charts. Since the January opener, FNV slipped more than 21%. Further, in the trailing one-month period, shares lost almost 10% of equity value. Therefore, it’s a high-risk, high-reward proposition. Still, it deserves consideration for its reliable financial print.
Since 2018, Franco-Nevada has enjoyed consecutive annual revenue increases. Also, despite bumps and bruises, it’s consistently profitable. Now, it must be stated that the company’s forward yield of 1.25% isn’t anything to write home about. But combined with the moderate buy view and average price target of $149.27 (implying almost 38% upside), FNV ranks among the top gold stocks.
Wheaton Precious Metals (WPM)
Another Canadian multinational enterprise, Wheaton Precious Metals (NYSE:WPM) is one of the more popular publicly traded safe havens. Primarily, the company specializes in the metals streaming business model. It’s similar to royalty firms. However, rather than taking a cut of revenue, streaming firms receive a portion of metals produced. Given the recent rise in gold prices, that might be the better deal.
Interestingly, investors agree wholeheartedly. Since the beginning of the year, WPM gained almost 17% of equity value. That’s a whole lot better than many other so-called best gold stocks. Better yet, the enthusiasm for WPM shares is justified based on the financials. Specifically, Wheaton enjoys strong margins across the board, beating out most competitors.
Moreover, the company enjoys a robust balance sheet, particularly its ultra-high cash-to-debt ratio. It also prints a three-year EBITDA growth rate of 34.2%, above nearly 80% of its rivals. In fairness, the company’s 1.27% forward yield is very modest. However, it also carries a strong buy view with a $52.71 price target, projecting over 11% growth.
B2Gold (BTG)
Moving over to the middle-to-smaller capitalization ideas for precious metal safe havens, B2Gold (NYSEAMERICAN:BTG) owns and operates gold mines in Mali, Namibia, and the Philippines. As a fair warning, it’s a bit riskier than other top gold stocks. Since the start of the year, BTG gave up more than 15% of equity value. Still, it’s also possible that it could be a de-risked opportunity.
For one thing, shares gained more than 2% in the trailing month. No, it’s not a performance stat to bank your life savings on. However, it does seem to suggest that the worst of the volatility could be behind us. On a financial level, B2Gold – despite its smaller profile – enjoys stability in the balance sheet. For example, its Altman Z-Score pings at 4.22, right in the safe zone.
Further, B2Gold enjoys strong operating and net margins that clock in at 36.15% and 13.96%, respectively. Even with these encouraging metrics, the market prices BTG at a discounted earnings multiple of 9.54x (without non-recurring items).
Also, BTG carries a strong buy consensus view with a $5.17 target, implying over 66% upside potential.
Agnico Eagle Mines (AEM)
Offering an intriguing mix of stability and upside prospects, Agnico Eagle Mines (NYSE:AEM) is a Canadian-based gold producer with operations in Finland, Australia, Mexico and its home nation. It also features exploration and development activities that extend to the U.S. To be sure, AEM slipped this year but modestly so, down a bit more than 4%.
Despite the crimson ink, Agnico may be one of the best gold stocks for balance. During the trailing one-month period, AEM spiked up more than 8%. This dynamic loosely suggests that the miner could be on a comeback trail. Financially, Agnico makes a very solid case with its profit margins. In particular, its net margin clocks in at a whopping 40.53%, above over 94% of its rivals.
Just as well, the company offers a forward yield of 3.12%. That’s better than the materials sector average of 2.82%, although the payout ratio is a bit elevated at 68%. Lastly, Agnico enjoys a unanimous strong buy assessment with a $60.58 target, projecting over 18% growth potential.
Victoria Gold (VITFF)
If you want to dial up the risk-reward profile of your publicly traded gold safe havens, you may want to give Victoria Gold (OTCMKTS:VITFF) a try. As a disclaimer, Victoria represents a speculative entity. For one thing, it’s on the smaller end of the small-cap spectrum. In addition, VITFF – as you can tell from its funky ticker symbol – isn’t traded in an exchange.
Rather, VITFF trades hands over the counter (across broker-dealer networks). Administratively, the risks to speculating on Victoria shares include wide bid-ask spreads and thin average volume. On the positive side, VITFF could be a hidden gem among speculative safe havens. For example, the company started generating revenue in 2020 and in 2022 posted sales of $236.9 million. On a trailing-12-month basis, revenue is at $305.6 million.
Also, the company enjoys a strong operating margin and a decent net margin. Even better, VITFF trades at 8.27x forward earnings, below the sector median value of 10.92x. Finally, analysts rate VITFF a strong buy with a $11.63 price target, projecting over 142% upside potential.
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.
