Gold prices are hitting record highs week after week in 2024, and this trend is expected to continue in the near future. Geopolitical factors and economic uncertainties contribute to the upward trajectory of gold. Investors often view gold as a safe-haven asset during economic turmoil or market volatility, leading to increased demand and higher prices.
Given the industry’s bright prospects, investors could consider investing in fundamentally sound gold stocks Gold Fields Limited (GFI), Barrick Gold Corporation (GOLD), and Dundee Precious Metals Inc. (DPMLF) for high-profit potential.
Gold is shining bright and is on the streak to hit record highs this year. The precious metal broke above $2,300 yesterday, owing to geopolitical and structural factors, and is further expected to hit $2,600 per ounce within a year, according to a market veteran.
Geopolitics is being attributed as a medium-term bullish case for gold amid the ongoing conflicts in Gaza and Ukraine, the upcoming U.S. election, and the unwavering recession concerns around major economies. Also, the growing probability of interest rate cuts by the Federal Reserve is another primary factor boosting gold prices.
Lower borrowing costs tend to increase the appeal of yellow metal as investors shift away from fixed-income assets like bonds.
The gold market is projected at 4.42 kilotons in 2024 and is anticipated to reach 6.32 kilotons by 2029, expanding at a CAGR of 7.4% during the forecast period (2024-2029). The primary factor driving the market growth is the rising demand for gold in its varied forms, like jewelry, technology, and long-term savings.
Gold mine production observed a year-on-year growth of 3% for the second successive year, propelling the segment's growth. In 2023, the full-year recycled gold supply rose 9% to 1,237.3 tonnes, and the total supply reached 4,898.8 tonnes.
The global gold mining market is projected to grow to $260 billion by 2030 at a CAGR of 3.5% during the analysis period. Increasing jewelry demand across the globe is propelling market growth along with collaborations of major companies through merger and acquisition (M&A).
Moreover, investors’ interest in gold stocks is evident from the SPDR Gold Trust ETF’s (GLD) 24.6% gains over the past six months.
In light of these encouraging trends, let’s look at the fundamentals of the three best Miners - Gold stocks, beginning with number 3.
Stock #3: Gold Fields Limited (GFI)
Headquartered in Sandton, South Africa, GFI operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. The company also explores for copper and silver deposits.
On April 2, 2024, GFI announced that it had started production at its Salares Norte mine in Chile’s Atacama province, pouring its first gold-silver doré on March 28, 2024. The project will drive the company’s growth, expand its portfolio, and add meaningfully to its cash flow profile.
On March 7, GFI completed the sale of all of its interest in the Asanko joint venture in Ghana to its joint venture partner, Galiano Gold Inc., and its subsidiaries. The transaction took place according to the share purchase agreement dated December 20, 2023.
As per consideration for the acquisition of GFI’s joint venture interest, Galiano and its subsidiaries paid an aggregate cash purchase price of $150 million and $20 million by issuing 28,500,000 Galiano shares.
For the fiscal year that ended December 31, 2023, GFI’s revenue increased 5% year-over-year to $4.50 billion. The company’s profit before taxation grew 5.2% from the year-ago value to $1.21 billion. Its profit for the year of $726.30 million indicates marginal growth from the prior year.
Furthermore, the company’s adjusted free cash flow and adjusted EBITDA came in at $367 million and $2.43 billion for the year, respectively.
Analysts expect GFI’s revenue and EPS for the fiscal year (ending December 2024) to grow 16.6% and 12.3% year-over-year to $5.25 billion and $1.06, respectively. Further, the company topped the consensus EPS estimates in three of the trailing four quarters.
Over the past six months, the stock has surged 55.6% and 19.3% over the past year to close the last trading session at $16.68.
GFI’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.
GFI has an A grade for Quality. It is ranked #10 out of 44 stocks in the Miners - Gold industry.
To check other POWR Ratings of GFI for Momentum, Growth, Value, Stability, and Sentiment, click here.
Stock #2: Barrick Gold Corporation (GOLD)
Based in Toronto, Canada, GOLD is engaged in the exploration, mine development, production, and sale of gold and copper properties internationally. The company has ownership interests in producing gold mines located in Argentina, Canada, Côte d'Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the United States.
On March 1, GOLD’s Africa-based largest gold mine, Kibali, and the Autorite de Regulation de la Sous-Traitance dans le Secteur Prive, the body monitoring the DRC’s sub-contracting sector, collaborated on a range of local content initiatives.
This strategic partnership has been designed to enhance the mine’s extensive use of Congolese contractors and suppliers in line with parent company Barrick’s global policy of supporting local businesses and employing host country nationals.
On February 14, the company declared a dividend of $0.10 per share for the fourth quarter of 2023. The dividend was paid on March 15, 2024, to shareholders of record at the close of business on February 29, 2024.
GOLD pays an annual dividend of $0.40, which translates to a yield of 2.30% at the current share price. Its four-year average dividend yield is 2.80%. Moreover, the company’s dividend payouts have increased at a CAGR of 16.1% over the past five years.
During the fourth quarter that ended December 31, 2023, GOLD’s revenues increased 6.9% from the prior quarter to $3.06 billion. The company's adjusted net earnings grew 11.5% and 12.5% quarter-on-quarter to $466 million and $0.27, respectively. Its attributable EBITDA and free cash flow were $1.07 billion and $136 million, respectively.
In addition, the company’s total cash and equivalents and total assets came in at $4.15 billion and $45.81 billion as of December 31, 2023, respectively.
Street expects GOLD’s revenue for the first quarter (ended March 2024) to increase 7.1% year-over-year to $2.83 billion, and its EPS for the same period is expected to grow 34.4% year-over-year to $0.19, respectively. Also, the company surpassed the consensus EPS estimates in each of the four trailing quarters.
Shares of GOLD have increased 14.4% over the past month and 22.5% over the past six months to close the last trading session at $17.39.
GOLD’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Quality, and Sentiment. Within the Miners - Gold industry, GOLD is ranked #7 among the 44 stocks.
Click here to access additional ratings of GOLD for Value, Momentum, and Stability.
Stock #1: Dundee Precious Metals Inc. (DPMLF)
Headquartered in Toronto, Canada, DPMLF is a gold mining company that engages in the acquisition, exploration, development, mining, and processing of precious metals. It mainly explores gold, copper, and silver deposits. The company explores for gold, copper, and silver deposits and has a portfolio of projects in Bulgaria, Namibia, Serbia, and Ecuador.
On March 7, 2024, DPMLF entered a definitive share purchase agreement with a subsidiary of Sinomine Resource Group Co. Ltd. for the sale of its interest in the Tsumeb smelter located in Namibia by disposing off all the issued and outstanding shares it indirectly holds in Dundee Precious Metals Tsumeb Holding (Pty) Ltd. for consideration of $49 million in cash.
After the sale, DPMLF will be able to emphasize restructuring and simplifying its portfolio and focus on gold mining assets.
On December 18, 2023, DPMLF and Osino Resources Corp. entered a definitive agreement where DPMLF acquired all the issued and outstanding common shares of Osino. The transaction added Osino’s high-quality, long-life Twin Hills open-pit gold project and an extensive exploration portfolio in Namibia to DPMLF’s existing portfolio of assets.
The acquisition strengthens DPMLF’s core competence and unique capabilities, adding a near-term producing asset and positioning DPMLF as a leading intermediate gold producer with exceptional assets and growth profile.
For the fourth quarter that ended December 31, 2023, DPMLF’s revenue increased 23.3% year-over-year to $139.30 million. Its adjusted net earnings rose 66.7% and 72.2% from the year-ago values to $55.50 million and $0.31 per share, respectively. Its adjusted EBITDA was $79.60 million, an increase of 36.5% from the prior year’s quarter.
Further, the company’s free cash flow increased 55.5% year-over-year to $51.80 million.
Analysts expect DPMLF’s revenue for the fiscal year (ending December 2025) to increase 5.2% year-over-year to $525.45 million. Also, shares of DPMLF have gained 5.8% over the past month and 30.5% over the past six months to close the last trading session at $7.61.
DPMLF’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
DPMLF has an A grade for Quality and Value. It has topped among 44 stocks within the same industry.
To see the other ratings of DPMLF for Sentiment, Growth, Momentum, and Stability, click here.
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GOLD shares were trading at $17.51 per share on Friday morning, up $0.12 (+0.69%). Year-to-date, GOLD has declined -1.85%, versus a 8.85% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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