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S&P 500   3,705.50 (+1.38%)
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AAPL   154.18 (+2.26%)
MSFT   241.02 (+1.50%)
META   138.99 (+1.92%)
GOOGL   99.70 (+1.56%)
AMZN   117.88 (+2.37%)
TSLA   286.73 (+3.88%)
NVDA   126.77 (+3.67%)
NIO   17.98 (+2.04%)
BABA   79.63 (+0.91%)
AMD   68.55 (+3.39%)
T   15.86 (+1.21%)
MU   50.40 (+3.11%)
CGC   2.87 (+4.74%)
F   12.17 (+1.50%)
GE   64.96 (+0.95%)
DIS   99.39 (+1.29%)
AMC   7.30 (+6.88%)
PYPL   86.62 (+2.80%)
PFE   44.34 (+1.16%)
NFLX   229.52 (+2.43%)
S&P 500   3,705.50 (+1.38%)
DOW   29,606.32 (+1.18%)
QQQ   277.80 (+1.25%)
AAPL   154.18 (+2.26%)
MSFT   241.02 (+1.50%)
META   138.99 (+1.92%)
GOOGL   99.70 (+1.56%)
AMZN   117.88 (+2.37%)
TSLA   286.73 (+3.88%)
NVDA   126.77 (+3.67%)
NIO   17.98 (+2.04%)
BABA   79.63 (+0.91%)
AMD   68.55 (+3.39%)
T   15.86 (+1.21%)
MU   50.40 (+3.11%)
CGC   2.87 (+4.74%)
F   12.17 (+1.50%)
GE   64.96 (+0.95%)
DIS   99.39 (+1.29%)
AMC   7.30 (+6.88%)
PYPL   86.62 (+2.80%)
PFE   44.34 (+1.16%)
NFLX   229.52 (+2.43%)
S&P 500   3,705.50 (+1.38%)
DOW   29,606.32 (+1.18%)
QQQ   277.80 (+1.25%)
AAPL   154.18 (+2.26%)
MSFT   241.02 (+1.50%)
META   138.99 (+1.92%)
GOOGL   99.70 (+1.56%)
AMZN   117.88 (+2.37%)
TSLA   286.73 (+3.88%)
NVDA   126.77 (+3.67%)
NIO   17.98 (+2.04%)
BABA   79.63 (+0.91%)
AMD   68.55 (+3.39%)
T   15.86 (+1.21%)
MU   50.40 (+3.11%)
CGC   2.87 (+4.74%)
F   12.17 (+1.50%)
GE   64.96 (+0.95%)
DIS   99.39 (+1.29%)
AMC   7.30 (+6.88%)
PYPL   86.62 (+2.80%)
PFE   44.34 (+1.16%)
NFLX   229.52 (+2.43%)

3 Mining Stocks That Will Benefit From the Demand For Physical Gold

3 Mining Stocks That Will Benefit From the Demand For Physical Gold

Lingering inflation will remain a catalyst for gold mining stocks 

Let’s face it, over the last several years, growth-minded investors have had many other shiny objects to chase. But for all the cries of “this time it’s different” many investors are finding out that “the more things change the more things stay the same” is a more apt cliche. And with consumer and producer prices continuing to increase, many investors are looking to preserve the gains in their portfolios. That’s when gold shines brightly.  

Over the last three years, the spot price of gold has increased by 31.9%. And according to ResearchandMarkets.com, the global gold mining market is forecast to grow at a compound annual growth rate (CAGR) of 3.1% from now through 2026.  

That may not sound particularly exciting. However, here’s something I wrote in August 2021 about the relationship of the price of gold to the S&P 500: “In the last 12 months, the S&P 500 is up 32.3%. In that same time period, the spot price of gold is down 8.4%. Typically, gold and equities have an inverse correlation. So it’s not surprising that gold is down. But it’s a bit curious that gold isn’t down even more.” 

My point at the time is the same now. Gold has a solid, and rising, floor. So it would seem that investing in physical gold would be a solid choice. And since the onset of the Covid-19 pandemic, industry analysts have noted an increase in the demand for physical gold.  


However, that demand also bodes well for gold mining stocks that are experiencing faster growth than the price of gold itself. And mining stocks give investors exposure to actual companies that have growth opportunities and dividends.  

The counterargument is that gold will lose its appeal when the Federal Reserve raises interest rates. Historically, that’s a fair argument. But for all the speculation of a 50 basis point increase perhaps even before the Fed meets in March, it doesn’t seem like the Fed really knows what it’s going to do. And publicly, many of the Fed presidents are suggesting a “measured approach” will be the order of the day. 

That suggests that gold still has time to shine. And here are three gold mining stocks that are poised to grow along with demand for physical gold.  

Barrick Gold (NYSE: GOLD) - GOLD stock is up 11% for the year. And that’s on top of a dividend that currently yields about 1.76% and has been rising over the past couple of years. Barrick is one of the largest miners in the world and has been seeing its production grow steadily in the past year. And when the company posts earnings on February 16, 2022 it’s expected to show that it met its production target for the third consecutive year.  

The stock has an attractive P/E ratio of 18.29 which is below its historical midpoint of around $24 per share. And the consensus 12-month price target for GOLD stock shows it reaching a new all-time high of $33.75.  

Kinross Gold Corporation (NYSE: KGC) - KGC stock is flat for the year. However, the company has a consensus price target of $10.03 which would be a 77% gain from the current price.  And investors are also getting a dividend yield of around 2.1%. 

Like Barrick Gold, Kinross has a strong production story. In the last earnings report, the company issued forward guidance for producion to increase from 2.1 million ounces in 2021 to 2.7 million ounces this year and 2.9 million ounces in 2023. Furthermore, management issued guidance of 1,110 an ounce for their all-in-sustaining cost. Therefore it would take a substantial collapse in gold prices to erode what appear to be strong earnings and free cash flow (FCF).  

Royal Gold (NASDAQ: RGLD) - This is not a dedicated mining play. Instead, the Colorado-based company is engaged in the acquisition and management of business interests related to precious metals. The company’s portfolio includes a companies that are delivering revenue and profits along with companies that are still in the exploratory stage, but show significant potential. 

Essentially, investors are buying a hedge against extreme fluctuations in gold stocks. As you might expect, the stock doesn’t carry as robust of a price target. At $136.90, it’s only offering about a 26% gain. However, investors will get a reliable dividend that has increased for 21 years and has a 1.29% yield.

 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Royal Gold (RGLD)
2.7222 of 5 stars
$86.46-2.0%1.62%20.63Moderate Buy$138.00
Kinross Gold (KGC)
2.3823 of 5 stars
$3.40+4.6%3.53%-7.08Moderate Buy$7.48
Barrick Gold (GOLD)
2.0985 of 5 stars
$14.52+2.3%2.75%12.85Moderate Buy$26.74
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Royal Gold right now?

Before you consider Royal Gold, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Royal Gold wasn't on the list.

While Royal Gold currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Chris Markoch

About Chris Markoch

Contributing Author: Retirement, Individual Investing

Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.

Contact Chris Markoch via email at CTMarkoch@msn.com.
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