Last Updated on March 7, 2023 by Ben
Are you looking to invest in gold, but don’t know where to start? These days it can be difficult to find out who is reputable and who isn’t. But don’t worry! Metal-res.com has compiled a list of the top 5 best gold stocks for you!
Whatever your goal, we believe our team of professionals can help you achieve it.
Table of Contents
- Best Gold Stocks Reviews
- Why Invest in Gold Stocks?
- Is Gold Worth Investing in 2021?
- Current and Historical Prices of Gold
- What Form of Gold Is the Right Investment for You?
- When Should You Buy Gold?
- The Problems with Gold Stocks
Best Gold Stocks Reviews
Here are the top 5 best Gold Stocks companies you should invest in:
Barrick Gold Corporation
Barrick (GOLD, $27.02) is primarily a gold-and-copper miner, with additional operations in silver and platinum. It is the largest gold mining company in the world, though it is a relatively new company. It was formed in 1995 through the merger of the Canadian Bre-X, American Homestake, and South African Randgruids mines. Though it has sold off some of its operations in recent years, it is still a leader in most of its endeavors.
In fact, Barrick’s most profitable operations are its Goldstrike mine in Nevada and its Lagunas project in Peru. The company has mines in North and South America, as well as Africa and Asia.
If you want gold exposure at a low price that is easy to buy and sell, then exchange-traded funds are the way to go.
- The first thing that people look for in a company is the return on investment, and
- Barrick has consistently delivered an average of 12% over the last decade.
- They are also paid dividends that have increased for the past three years.
- Next, the company is very secure since they maintain their assets at a great level: their debt to assets ratio is at a minimum and they have billions of dollars in cash.
- Last but not least, they are a diversified company which means that they don’t just mine gold or copper; they also own other metals such as zinc, lead, and uranium. This makes them more resilient to fluctuations in commodity prices.
- Though the company’s fundamentals make it one of the best Gold Stocks out there, its high valuation can be a concern if interest rates rise significantly.
Franco-Nevada Corporation (NYSE: FNV) is the top gold stock for the year so far, up a strong 16.82%. This is an excellent company that has surpassed many of the recent challenges in the mining industry. The stock has performed well over the years with a solid management team and during these current uncertain times, it remains a safe stock with high potential returns. The company was created in 1986 by the current CEO, Sean Boyd. It engages in financing, exploring, and developing resources primarily in the areas of precious and base metals.
- In Franco-Nevada Corporation, you can get a similar bundle of traits as I mentioned with Barrick Gold: exposure to the price of gold, as well as an ownership stake in some of the world’s best mining companies.
- Its streaming deals include a large, streaming deal from Vale to cover a portion of its output at the Salobo mine in Brazil; a streaming deal with St. Paul for its Chinchillas silver project in Argentina; and a streaming deal with Hudbay Minerals for its Constancia project in Peru.
- The company has a market cap of $4.34 billion and an enterprise value of $5.87 billion. As you might have guessed, there are other gold-oriented companies besides the one’s I’ve mentioned.
- It is more narrow in terms of its focus. While this isn’t necessarily a bad thing if you’re looking to be more focused, you may want to consider other companies that can give you a bit more diversification.
- The company also isn’t the best value when compared to the potential profit it could give you.
This target company is an up and coming entrant in the North American gold market. The company is headquartered in Canada with most of its mining operations taking place there as well as in South America. It holds a market value of about $700 million US and generates about $700,000,000 USD in revenue each year. While this might seem like a profitable company, it has actually posted losses in the past and has also never paid out a dividend to investors within the past five years. Given its current financial situation, it cannot even pay for its day-to-day operations.
While there are many mining companies in the world, some good ones in Canada and elsewhere, most of them do not trade at a low enough value to make buying stock in them affordable.
- B2 Gold is one of the few affordable mining companies trading on a major exchange and thus has become one of your targets.
- It has not made many large advances recently and thus has remained a fairly obscure company.
- The company does have a mine in Africa that has yet to see a profitable year, but it also has two other mines in Canada that each generate about $100 million USD in revenue a year.
- If the African mine can start turning a profit soon then this could be a good investment.
- They also have many properties outside of Africa in case their other projects do not pan out.
- The stock price is depressed right now and many investors are unaware of this company’s potential.
- It has not had success in its African mine and likely won’t for a while.
- While company management seems solid, there’s always the chance that it can make mistakes in its future endeavors.
- Lower gold prices might cause some trouble; however, with mines that operate for less, this should help keep things stable.
I Am Gold Corporation
This company operates in a different fashion than many of the other gold mining companies you have researched. Most mining companies start out finding a potential mine and then acquire funding to open it up and start working the mine. While it is successful this process can take years and put the company at risk of not being able to pay for its operations during that time.
I Am Gold ( AMEX: IAG, $2.42) takes a much different approach in that it buys up the developed mines from other companies that no longer want to operate them. This allows the company to start generating an income as soon as the deal is made, and also allows for quick expansion as acquiring these mines doesn’t take as long and doesn’t require as much capital to get started.
- IAG starts up mines much quicker by using the funding it has available to build and operate mines right away.
- It uses its profits from its functioning mines to help build new mines while also building up reserves for the future.
- It is a risky tactic since if any of the mines it operates under this method fail, the company risks going under. However, you feel that the company has enough excess funds to make this tactic worthwhile.
- The one downside to IAG is that most of its mines are in Africa and South America.
- While you likely won’t have to travel there, you may have to deal with the occasional annoying international issues such as paperwork, traveling, or communication.
Kirkland Lake Gold
With several gold mines located in North America, this is the safest bet for your possible venture into gold mining. Gold mining has been a very profitable business for over a century and there is no sign of that changing. KLG has been in business for over 40 years and shows no signs of going under any time soon.
This is a company that was once publicly traded, but was recently bought out and taken private by management. While this makes it harder to get information about the company, it also means that there is less government oversight and reporting, which can be good and bad.
- The company is part of the S&P/TSX Composite Index, the FTSE4Good Index, and the DJSI (DJSI Gold Mines).
- It has been profitable for nearly a decade.
- It owns and operates five mines in the Kirkland Lake area of northern Ontario.
- In 2011 the company produced 4.6 million ounces of gold at all its mines.
- Its total assets were valued at $1.3 billion and it had sales revenue of $1.4 billion.
- The company’s most profitable mine is the MacMac mine, which produced nearly 1 million ounces of gold in 2011 and accounted for over half of the company’s profit for that year.
- The company has been accused of insufficient environmental protection at its mines, specifically its Northwest Basin mine.
- It was involved in an accident in 2008 that resulted in two broken ribs for one worker and almost killed another.
- It is predicted that between 2015 and 2020, as its profitable mines start running dry, it will find itself with serious financial issues.
Why Invest in Gold Stocks?
When it comes to investing, people often want advice and guidance on what stocks they should invest in. There are many factors that go into the decision of which stocks you should invest in, but one thing is for sure: gold is always a good investment.
Many conservative investors like to keep some of their money in gold simply because it’s a universal hedge against all markets. Since the value of gold tends to remain steady regardless of what the rest of the economy is doing, it makes a perfect safe haven for your money.
Additionally, gold prices are historically volatile, meaning that it fluctuates quite a bit. The price per troy ounce can rise and fall daily, so you could potentially make a lot of money if you were to invest in it.
Is Gold Worth Investing in 2021?
Yes, experts say it is. The value of gold has risen considerably over the past decade. Between 2001 and 2011, the price rose by a whopping 400 percent! If you had invested in gold right before this timeframe and cashed out right after, you would’ve made a killing on your investment.
If you plan on investing in gold, make sure you do your research first. Check online for reviews of different gold dealers and choose one that you feel most comfortable with. Make sure you keep your eye on the market so you can get the best price.
And lastly, never invest more than you’re willing to lose. The purpose of making an investment is to eventually make money off of it, but there’s always a possibility that you might lose it all. Don’t put more money into your investment than you can afford to part with.
Current and Historical Prices of Gold
The price of gold is currently $1,791.70 per troy ounce in the August 2021 forecast. This is a huge increase from the annual % change year ago which was 24.43% per troy ounce. You should also keep in mind that the price of gold changes every day.
The price of gold has been steadily on the rise over the past few years, with an all-time high of $1,409.51 per troy ounce back in 2013. It then dropped a bit after that, but has been increasing again over the past three years or so.
It will be interesting to see what the future of gold holds, but for now, it’s a good time to buy, especially if you plan to hold onto it for a few years.
What Form of Gold Is the Right Investment for You?
When you decide to buy gold, you have a few different options of what type to buy.
Here are a few of your choices:
Gold coins – The most common coin is the standard Gold Eagle from the United States. There are also Austrian Philharmonics and South African Krugerrands, as well as other coins from other countries. The prices on these can vary as they are often worth more than the gold “ply” (price per troy ounce) Also, different coins may be in higher demand than others at any given time, causing the price of those coins to rise or fall.
Bullion bars – These come in various weights, such as 1 troy ounce, which is the most common, all the way up to 1000 troy ounces. Many times, the price per ounce of the bar increases as the weight of the bar increases.
When Should You Buy Gold?
There really isn’t a bad time to buy gold. There are always factors in the economy and the world that can drive the price up at any given moment. In addition, savings in gold don’t lose their value year after year as paper currency does. Many people also view it as an investment for the future, though you should always be careful not to over-invest.
If you want to buy physical gold, please be careful to buy from a reputable dealer only. Be sure that you are paying a fair market price, as there are a lot of scammers out there just waiting to separate you from your money.
Buy carefully and educate yourself as much as possible before making any decisions. If you have any questions, please Metal-res.com.
The Problems with Gold Stocks
A lot of people invest in gold by buying gold stocks. These provide them with a way to take advantage of the steadily rising price of gold. However, beware that this is not without its risks, as gold stocks also have the potential to fall. If you want to decrease your risks while still making a profit, then learn how to invest in gold futures or options could be your best choices.
Stock investing is not similar to putting money into a savings account or a brokerage account. It’s like buying and selling stocks in the stock market, but it involves gold instead of shares of stock companies. In fact, you’re really only getting one side of the coin when you buy and sell stocks – what are the underlying gold prices? The price for physical bullion coins is set by supply and demand (and also inflation). When there is too much supply available at any given time, prices rise; when there isn’t enough, they fall.
Besides all these factors, the main problem with gold stocks is that they are very easy to manipulate.
Remember that gold stock investing is like buying and selling stocks in the stock market; some will go up and some will go down, and as a gold stock investor you are always at risk no matter what the situation is and how much research you put in. As with anything of great value, it takes time and effort to achieve a goal. And that is what it takes to become a successful gold stock investor. I hope I have helped you through some of the basics of gold-stock investing and I wish you the best of luck in your future endeavors.
What gold stocks are you invested in? Have you looked into other precious metal mining companies outside of the gold market? Let us know in the comments below!