Gold has long been considered a reliable store of value during times of economic uncertainty, such as geopolitical tensions or inflation. As a safe-haven asset, it often performs well alongside the U.S. dollar, offering protection from market volatility.

To take advantage of this trend, investing in strong gold stocks like Newmont Corporation (NEM), Barrick Gold Corporation (GOLD), and Agnico Eagle Mines Limited (AEM) can be a smart strategy as demand for safe-haven assets rises.

Unlike other assets that generate returns through interest rates or dividends, gold’s value remains independent of these factors, making it particularly appealing during uncertain times when other investments may face volatility. Beyond its financial value, gold holds cultural significance and is used in various industries, including electronics, healthcare, semiconductors, and space exploration.

This year, gold has reached multiple all-time highs, and according to Goldman Sachs Research, it is expected to rise even further. With central banks in emerging markets increasing their gold purchases, the precious metal is forecasted to reach $3,000 per troy ounce by the end of 2025.

Furthermore, macro uncertainties are driving up demand for gold as a hedge against instability. With the Fed expected to cut interest rates on November 7, 2024, due to declining inflation, cooling labor markets, and tight credit conditions, investors are flocking to gold to preserve wealth. Moreover, continued buying during price corrections further strengthens market stability.

Considering these conducive trends, let’s analyze the fundamental aspects of the three Miners – Gold picks, beginning with the third choice.

Stock #3: Newmont Corporation (NEM)

NEM engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana.

On October 29, 2024, NEM commissioned its first battery-electric large mining truck, the Cat 793 XE, at its Cripple Creek and Victor mine, advancing its commitment to sustainable mining and emissions reduction.

On October 15, 2024, NEM and MKS PAMP launched a traceable 1oz Lady of Liberty gold bar, exclusively using Newmont-mined gold and refined by MKS PAMP in Switzerland. This initiative provides transparency and assures consumers of the gold’s origin through Provenance technology.

In terms of the trailing-12-month gross profit margin, NEM’s 38.58% is 34.9% higher than the 28.59% industry average. Likewise, its 35.37% trailing-12-month EBITDA margin is 115.7% higher than the 16.40% industry average. Also, its 6.05% trailing-12-month Return on Total Capital is 23.1% higher than the 4.91% industry average.

NEM’s sales for the fiscal third quarter ended September 30, 2024, rose 84.7% year-over-year to $4.61 billion. Its adjusted EBITDA increased 110.8% over the prior-year quarter to $1.97 billion. Also, the company’s adjusted net income and adjusted net income per common share attributable to NEM’s stockholders were $936 million and $0.81, reflecting increases of 227.3% and 125% year-over-year, respectively.

Analysts expect NEM’s EPS and revenue for the quarter ending December 31, 2024, to increase 115.9% and 29.8% year-over-year to $1.08 and $5.14 billion, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, NEM’s stock has gained 32.2% to close the last trading session at $44.08.

NEM’s promising outlook is reflected in its POWR Ratings. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Growth. Within the B-rated Miners – Gold industry, it is ranked #26 out of 42 stocks. To see NEM’s ratings for Value, Momentum, Stability, Sentiment, and Quality, click here.

Stock #2: Barrick Gold Corporation (GOLD)

Based in Toronto, Canada, GOLD engages in the exploration, mine development, production, and sale of gold and copper properties internationally. The company also explores and sells silver and energy materials. It holds ownership interests in gold-producing mines located in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the United States.

On October 2, 2024, GOLD announced the official launch of the Super Pit Expansion at its Lumwana copper mine in Zambia, which aims to double copper production and transform Lumwana into a top 25, Tier One copper producer. The $2 billion project will support local capacity development, create thousands of jobs, and stimulate regional growth.

In terms of the trailing-12-month levered FCF margin, GOLD’s 8.53% is 68.1% higher than the 5.07% industry average. Similarly, its 44.69% trailing-12-month EBITDA margin is 172.5% higher than the industry average of 16.40%. Its 24.73% trailing-12-month EBIT margin is 129.4% higher than the industry average of 10.78%.

In the second quarter, which ended June 30, 2024, GOLD’s revenues grew 11.6% year-over-year to $3.16 billion. Similarly, the company’s attributable EBITDA increased 30.5% year-over-year to $1.29 billion. Its adjusted net earnings were $557 million, or $0.32 per share, up 65.8% and 68.4% from the year-ago values, respectively.

Street expects GOLD’s EPS and revenue for the quarter ended September 30, 2024, to increase 31.8% and 16.6% year-over-year to $0.32 and $3.34 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past nine months, GOLD’s stock has gained 19.4% to close the last trading session at $18.11.

GOLD’s POWR Ratings reflect its bright outlook. It has an overall rating of B, translating to a Buy in our proprietary rating system.

It has a B grade for Quality. It is ranked #11 in the same industry. To see GOLD’s Growth, Value, Momentum, Stability, and Sentiment ratings, click here.

Stock #1: Agnico Eagle Mines Limited (AEM)

Headquartered in Toronto, Canada, AEM is a gold mining company involved in the exploration, development, and production of precious metals. It explores for gold, with mines located in Canada, Australia, Finland, and Mexico, and exploration and development activities across Canada, Australia, Europe, Latin America, and the United States.

In terms of the trailing-12-month Return on Total Capital, AEM’s 6.70% is 36.3% higher than the 4.91% industry average. Its 23.75% trailing-12-month levered FCF margin is 368% higher than the 5.07% industry average. In addition, its 21.51% trailing-12-month Capex / Sales is 174.2% higher than the 7.84% industry average.

During the third quarter, which ended September 30, 2024, AEM’s revenues from mining operations increased by 31.2% from the year-ago value to $2.16 billion. The company’s adjusted net income was $572.58 million and $1.14 per share, indicating increases of 167.3% and 159.1% from the prior year’s period, respectively. Its adjusted EBITDA was $1.26 billion, up 63.5% year-over-year.

For the quarter ending December 31, 2024, AEM’s EPS and revenue are expected to grow 110.4% and 21.8% year-over-year to $1.20 and $2.14 billion, respectively. It surpassed the EPS estimates in each of the trailing four quarters. Over the past nine months, AEM’s stock has gained 75.1% to close the last trading session at $83.14.

AEM’s POWR Ratings reflect solid fundamentals. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It is ranked #9 in the Miners – Gold industry. It has an A grade for Sentiment and a B for Growth and Quality. Click here to access additional ratings for AEM’s Value, Momentum, and Stability ratings.

What To Do Next?

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NEM shares were trading at $44.43 per share on Wednesday afternoon, down $1.57 (-3.41%). Year-to-date, NEM has gained 9.37%, versus a 25.59% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More...

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