3 precious metal mining stocks with an attractive FCF yield to buy in August

If last week financial market participants focused on the jobs report released in the United States, this week it is all about inflation. On Thursday, the US inflation data is due, and once again, volatility remains subdued until the report is published.

Progress has been made on the inflation front. While still above the Fed’s 2% target, inflation has come down from four-decade-high levels.

Nevertheless, it is far from the 2% level and on Thursday, it is expected to show that the prices of goods and services have increased by 3.3% YoY. As such, investors wanting to hedge their portfolios against inflation have the option to buy gold and other precious metals, which historically performed well in an inflationary environment.

Another alternative to gain exposure to gold and other precious metals is to own metal mining stocks. One criterion to use to find attractive stocks is to look at the free cash flow (FCF) yield.

Free cash flow is what is left after a company covers all its operating and capital expenses. It is a profitability indicator; more simply, it shows money left to be distributed to investors.

The free cash flow yield is calculated by dividing the free cash flow per share by the current share price and presenting the result as a percentage. Naturally, the higher the yield, the better, so here are three precious metal mining stocks to buy as they have an attractive free cash flow yield:

• Resolute Mining (RMGGF:PKC)
• Dundee Precious Metals (DPMLF:PKC)
• Emerald Resources (EOGSF:PKC)

Resolute Mining

Resolute Mining is an Australian-African gold mining company. Its shares are listed on the Australian Stock Exchange and London Stock Exchange and can also be traded in the United States in the over-the-counter market.

The free cash flow yield is 13.6%, and the stock price is up +81.44% YTD. As an explorer and operator of gold mines, it generated $651 million in revenue in 2022 and $161 operating cash flow.

Dundee Precious Metals

Dundee Precious Metals is a Canadian mining company. The stock price gained 37.07% YTD, and the 9.4% free cash flow yield reflects a healthy financial standing.

The stock is listed in Canada and Germany and can also be traded in the United States in the over-the-counter market.

Emerald Resources

Emerald Resources is an Australian company that explores and develops gold projects. The 7.8% free cash flow yield is attractive, especially considering the stock price gained +484% in the last five years.