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Best gold stocks to buy in 2021
This page lists our favourite gold companies for the year ahead and explains why we are excited about them. In addition, we’ve summarised the best trading platforms to use to get them and how to make sure your investment experience is as good as it can be.
What are the top gold stocks to buy?
The table below ranks the leading gold companies by how good an investment we think they’re going to prove. You can follow the links in the table to find their current share price, or scroll down to learn more about each one.
|#||Stock symbol||Company name|
|2||GOLD||Barrick Gold Corporation|
|4||WPM||Wheaton Precious Metals Corporation|
|5||AULGF||AngloGold Ashanti Limited|
Scroll down to find out more information about each of these companies and for more information about the gold space in general.
1.) Newmont Corporation (NYSE: NEM)
Incorporated in 1921, Newmont Corporation is the world’s largest gold mining company. With gold mines in Colorado, Ontario, Nevada, Mexico, Australia, the Domincan Republic, Ghana, Peru, Argentina and Suriname, the company churns in the region of 6 million ounces of consolidated gold production and over $11 billion of revenue per year.
The reason Newmont os on our list is because of its huge, diversified portfolio, and because it has plenty of cash in its treasury, it has the potential to conduct further mergers and acquisitions in the future and create growth.
In the last 5 years, the company’s share price has increase drastically, and it has managed to do this while maintaining a solid dividend of over 3%. With a market cap of over $50 billion, Newmont has the value we are looking for in a gold major with the growth potential one might expect to find in a gold junior.
2.) Barrick Gold Corporation (NYSE: GOLD)
Barrick Gold is a major gold mining company that produces gold and copper from 16 assets in 13 countries. Founded in 1983 and headquartered in Toronto, the company employs over 18,000 workers and produces around 5 million ounces of gold and $9 billion in revenue per annum.
The company’s share price was performing extremely well until the COVID-19 crisis, which severely hampered its operations around the world. Since lockdowns have come to an end, Barrick Gold has experienced a resurgence, and its share price is now firmly locked on an upward trajectory.
The main reason Barrick is on our list is because it also produces significant anmlunt of silver and copper, giving it a degree of diversification that isn’t present with all gold mining stocks. Though its <1% dividend yield is not the best around, it is a nice bonus for a growing major stock with the capacity to deliver returns.
3.) Franco-Nevada Corporation (NYSE: FNV)
Franco-Nevada has been around in some form since 1983, though its current incarnation was created in 2002 when it was acquired by Newmont. In 2007, Newmont spun off Franco-Nevada via an IPO.
The company now has royalties and streams on almost 300 royalties, two-thirds of which are precious and base metals assets and one-third in oil and natural gas. These assets create around $1 billion in revenue per year and this has grown the company’s market cap to over $30 billion.
The company’s share price has performed well in the last 5 years, though the main reason it is on our list is because it offers de-risked exposure to gold. This is because its revenue streams are spread across hundreds of assets, and it also takes on no exploration or development expenditure and risk.
4.) Wheaton Precious Metals Corporation (NYSE: WPM)
Founded in 2004 and headquartered in Vancouver, Wheaton Precious Metals is one of the world’s largest precious metals streaming company, and it operates multinationally. The company has streaming agreements on over 20 operating gold and silver mines.
With a market cap of over $19 billion, Wheaton has grown quickly to become a solid performer, and its share price has consistently grown for much of the past 5 years. It also offers a small dividend to sweeten the deal for investors.
The reason Wheaton has secure a spot on our list is because we feel it is the best option in its class: gold and precious metals streaming. The company has proven to be consistently profitable, and further streams could unlock even more value.
5.) AngloGold Ashanti Limited (OTCMKTS: AULGF)
Formed in 2004 via the merger of AngloGold and the Ashanti Goldfields Corporation, AngloGold Ashanti is a large gold mining player with over 20 operations spread across 4 continents. The company produces over $4 billion in revenue from its over 3 million ounces of gold production per annum.
In the last few years, the company’s share price has found a fairly consistent level, and its market cap now stands at over $9 billion. The company also produces silver and uranium oxide, which are profitable by-products.
The reason AngloGold Ashanti is on our list is because of the location of its assets. They are primarily based in Africa, which is a low-cost, underexplored region with massive potential for gold mining companies to locate new, high-grade resources.
Where to buy the best gold shares
If you want to get shares now, this is most easily done via an online stockbroker. These are convenient services that allow you to control your entire portfolio from the comfort of your desktop or handheld device, and they often have low fees. The table below includes some of our favourite options.
What is a gold stock?
It is a publicly traded company that is involved in the exploration, development and production of gold via mining or royalty and streaming agreements on gold assets.
Explorers acquire a promising land package and market it to increase their share price. They are then either taken out by a more senior mining company or on occasion, they begin developing the mine.
Developers de-risk and build infrastructure at gold mining sites. They often produce formal documentation like Preliminary Economic Assessments, Preliminary Feasibility Studies, Feasibility Studies, and Definitive Feasibility Studies to evidence the scale and grade of the gold resource.
Producers take gold mining assets into production and attempt to create a consistent amount of gold, which often comes with byproducts when the raw ore is processed.
Royalty companies make arrangements to help finance gold producers in return for a percentage of revenue on each ounce of gold that comes out of the ground.
Are gold shares a good investment?
Historically, gold has always been seen as the ultimate safe-haven investment. When equities markets are volatile, investors often park some of their capital in gold via some form of investment. Gold explorers, mine developers, producers and royalty companies all give you exposure to the asset in a slightly different way.
Gold has minimal industrial applications, bar its use in some processors and nanotechnology. Its main use is as a consumer good in the jewellery industry, which accounts for well over 30% of demand. Moreover, this demand is consistent, and companies that offer exposure to this market are often profitable.
In recent years, the gold price has performed extremely well, even breaching the $2,000/oz barrier in 2020. This has resulted in the vast majority of producers faring well, though explorers and developers without an active stream of revenue have fared slightly worse. When investing in a gold company, make sure to conduct extensive due diligence.
When choosing from a range of gold producers, make sure to pay close attention to the all-in sustaining cost, or AISC. In an ideal world, this will be below the magic $1000/oz figure, giving the mine strong profitability, even in depressed market conditions. For the latest gold news, click any of the links below.