3 Gold Stocks to Hedge Against Market Uncertainty

Gold prices have been on the uptrend in 2024 till now, driven by geopolitical tensions, improving mining activities, and robust demand across the globe. Prices are further expected to spike in the upcoming time, resulting in bright prospects for the market.

Given this backdrop, investors could consider fundamentally solid gold stocks AngloGold Ashanti plc (AU), Agnico Eagle Mines Limited (AEM), and Barrick Gold Corporation (GOLD) as investments to hedge against market uncertainties.

In 2024, gold prices have reached record highs and analysts expect the stream to continue with projections that the metal will hit $3,000 per ounce next year, as the U.S. Federal Reserve meeting draws closer. Also, market uncertainties like elections, Ukraine’s recent incursion back into Russia and rising Middle East tensions are fueling the gold market.

Sabrin Chowdhury, head of commodities analysis at BMI said, “2024 is the year where gold is supposed to reach multiple highs,” referring to gold’s appeal as a safe haven asset.

Between January 1971 and March 2024, gold had average annual returns of 7.98%, and in 2023, its annual average return was 13.1%. Gold appeals to a variety of investors owing to its historical importance, financial stability, and cultural appeal.

Also, IMARC Group expects the global gold market to hit around 3460.71 tons by 2032 largely influenced by the improving exploration technologies, rising gold prices, and improvements in mining practices.

Given the industry’s encouraging trends, let’s delve into the fundamentals of the top three Miners - Gold stocks, beginning with number 3.

Stock #3: AngloGold Ashanti plc (AU)

AU operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, and produces silver and sulphuric acid as by-products. The company’s flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania.

In terms of forward non-GAAP P/E, AU is trading at 11.78x, 24.9% lower than the industry average of 15.69x. Likewise, the stock’s forward EV/EBITDA multiple of 5.82 is 32.3% lower than the industry average of 8.59. Further, its forward Price/Cash Flow of 6.37x is 29.4% lower than the industry average of 9.03x.

During the second quarter that ended June 30, 2024, AU’s revenue from product sales rose 19.2% year-over-year to $1.38 billion. The company’s gross profit grew 84.6% from the year-ago value to $467 million. Its profit for the period and EPS came in at $262 million and $60, against loss for the period of $81 million and $20 per share during the prior year’s quarter, respectively.

Also, the company’s adjusted EBITDA increased 92.1% year-over-year to $684 million and its free cash flow was $183 million for the quarter.

Analysts expect AU’s EPS for the fourth quarter (ending December 2024) to grow 110.6% year-over-year to $1.79. The company’s revenue and EPS for the fiscal year 2025 are expected to increase 7.2% and 28.9% year-over-year to $6.03 billion and $3.51, respectively.

Shares of AU have gained 80.7% over the past six months and 97.5% over the past year to close the last trading session at $32.09.

AU’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

AU has an A grade for Growth. It is ranked #14 out of 41 stocks in the B-rated Miners - Gold industry.

To check other POWR Ratings of AU for Sentiment, Quality, Value, Momentum, and Stability, click here.

Stock #2: Agnico Eagle Mines Limited (AEM)

Based in Toronto, Canada, AEM is engaged in the exploration, development, and production of precious metals. The company’s mines are located in Canada, Australia, Finland and Mexico, having exploration and development activities in Canada, Australia, Europe, Latin America, and the United States.

On June 24, AEM announced that it has acquired 33,821,842 common shares of Maple Gold Mines Ltd. on June 21, 2024 at a price of $0.085 per common share for total consideration of about $2.87 million from several sellers that acquired the common shares in connection with an offering of flow-through common shares issued by Maple.

With this share purchase, AEM owns 74,674,257 common shares, representing around 19.9% of the issued and outstanding common shares.

During the second quarter that ended June 30, 2024, AEM’s revenues from mining operations grew 20.9% from the year-ago value to $2.08 billion. Its adjusted net income of $535.27 million and $1.07 per share, indicates growths of 68.2% and 64.6% from the prior year’s quarter, respectively. The company’s adjusted came in at $1.18 billion, up 32.9% year-over-year.

Furthermore, the company’s free cash flow increased 86.7% from the year-ago value to $557.24 million.

Analysts expect AEM’s revenue and EPS for the third quarter (ending September 2024) to grow 27.5% and 105.9% year-over-year to $2.09 billion and $0.91, respectively. Also, the company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past six months, AEM’s stock has surged 68.7% and 76.1% over the past year to close the last trading session at $82.04.

AEM’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

AEM has a B grade for Sentiment and Growth. It is ranked #11 out of 41 stocks in the Miners - Gold industry.

To check other POWR Ratings of AEM for Quality, Value, Momentum, and Stability, click here.

Stock #1: Barrick Gold Corporation (GOLD)

Headquartered in Toronto, Canada, GOLD is in the exploration, mine development, production, and sale of gold and copper properties internationally. The company has ownership interests in producing gold mines in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the U.S.

On August 12, GOLD declared a dividend of $0.10 per share for the second quarter of 2024. The second quarter 2024 dividend will be paid on September 16, 2024 to shareholders of record at the close of business on August 30, 2024.

GOLD pays an annual dividend of $0.40, which translates to a yield of 1.96% at the current share price. Its four-year average dividend yield is 2.95%. Moreover, the company’s dividend payouts have increased at a CAGR of 18.7% over the past five years.

On July 16, GOLD posted preliminary second quarter production of 948 thousand ounces of gold and 43 thousand tonnes of copper, and preliminary second quarter sales of 956 thousand ounces of gold and 42 thousand tonnes of copper. According to the guidance, GOLD’s gold and copper production is expected to increase each quarter through the year.

During the second quarter that ended June 30, 2024, GOLD’s revenues increased 11.6% year-over-year to $3.16 billion. The company’s adjusted net earnings grew 65.8% and 68.4% from the prior year’s quarter to $557 million and $0.32 per share, respectively. Its attributable EBITDA rose 30.5% from the year-ago value to $1.29 billion.

Analysts expect GOLD’s revenue for the third quarter (ending September 2024) to increase 31.6% year-over-year to $3.77 billion, and its EPS is expected to increase 53.1% year-over-year to $0.37 for the same quarter. Moreover, the company has topped the consensus EPS estimates in all of the trailing four quarters.

Over the past six months, the stock has surged 38.6% and 29.9% over the past year to close the last trading session at $20.41.

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

GOLD has a B grade for Sentiment and Quality. It is ranked #7 in the list of 41 stocks within the same industry.

To see the other ratings of GOLD for Growth, Value, Stability, and Momentum, click here.

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AEM shares were trading at $82.89 per share on Wednesday afternoon, up $0.85 (+1.04%). Year-to-date, AEM has gained 53.28%, versus a 18.72% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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