FEATURED PARTNER OFFER FREE GOLD when you open a gold IRA. ZERO set up, shipping, and insurance fees for up to 10 years. YOU choose your gold & silver. Select from the most popular products – you’re in charge. Account lifetime service. A personal resource throughout your ownership of precious metals. On Augusta Precious Metals Website. when you open a gold IRA. ZERO set up, shipping, and insurance fees for up to 10 years. Select from the most popular products – you’re in charge. A personal resource throughout your ownership of precious metals.Augusta Precious Metals
The Best Gold Stocks of January 2024
| Company (Ticker) | Market Cap |
|---|---|
| Eldorado Gold Corporation (EGO) | $2.5 billion |
| Dundee Precious Metals Inc (DPM.TO) | $1.1 billion |
| DRDGold Limited (DRD) | $0.7 billion |
| Gold Fields Limited (GFI) | $12.7 billion |
| Wheaton Precious Metals Corp (WPM) | $21.5 billion |
| Alamos Gold Inc. (AGI) | $5.2 billion |
| Harmony Gold Mining Limited (HMY) | $3.8 billion |
Eldorado Gold Corporation (EGO)
5-Year Forward EPS Growth Estimate
183.0%
5-Year Trailing Sales Growth
15.5%
Solvency Ratio
38%
183.0%
15.5%
38%
Why We Picked It
Eldorado is a gold and base metal miner with operations in Canada, Turkey and Greece.
The stock has the strongest EPS growth forecast on this list, but historical earnings have been erratic, oscillating between losing years and profitable years. Sales have seen overall growth in the last five years but can also be erratic.
The stock has a “B” financial health rating from Morningstar, which indicates a strong financial position. The current solvency ratio of 38% means that the company has significant cash flow to cover liabilities. Over 20% is generally considered safe.
Where the stock excels is in its price performance. It has returned 283.9% over the last five years and 45.7% over the last year. For comparison, the SPDR Gold Shares (GLD) returned 56.0% and 10.9% over those same periods.
The strong price performance is important because when the price of gold is rising like in 2023, gold investments should also rise. The strong demand for the stock could be due to a 920.0% EPS growth estimate for this year and 9.8% for next year.
Dundee Precious Metals Inc (DPM.TO)
5-Year Forward EPS Growth Estimate
145.0%
5-Year Trailing Sales Growth
10.1%
Solvency Ratio
256%
145.0%
10.1%
256%
Why We Picked It
Dundee Precious Metals is a Canadian company that trades on the Toronto Stock Exchange and on the U.S. over the counter (OTC) market under symbol DPMLF. It has current operations in Bulgaria and Namibia.
Sales are in an overall uptrend although they don’t generally increase every year. Earnings can be erratic but analysts expect strong growth over the next five years, including a 42.9% EPS jump this year. Analysts expect a 26.9% EPS drop in 2024 though.
The stock has an “A” financial health rating from Morningstar, which is relatively rare among mining stocks. Combined with its high solvency ratio, Dundee is in good financial health.
The stock has been a strong performer, rallying 214.6% over the last five years and 51.6% over the last year, well outpacing the performance of gold.
Dundee pays a dividend with a current yield of 2.3%.
DRDGold Limited (DRD)
5-Year Forward EPS Growth Estimate
10.0%
5-Year Trailing Sales Growth
17.2%
Solvency Ratio
201%
10.0%
17.2%
201%
Why We Picked It
DRDGold is a South African company focused on retreatment, which is extracting and processing gold from other mining residue.
Sales are in an overall uptrend the last decade and earnings can be erratic but analysts expect steady EPS growth of approximately 10% per year over the next five years.
The stock has a “C” financial health rating, which is on the lower end of financial health, but it is still of investable quality. The high solvency ratio and the company’s long history indicate it is in a solid financial position, despite its lower rating.
DRD has the highest dividend yield on this list at 5.8%, and the company has been paying a dividend for 16 uninterrupted years.
Over the last five years, DRD is the second-strongest performer on the list with a total return of 358.9%, but only a 14.2% increase in the last 12 months.
Gold Fields Limited (GFI)
5-Year Forward EPS Growth Estimate
9.4%
5-Year Trailing Sales Growth
10.9%
Solvency Ratio
65%
9.4%
10.9%
65%
Why We Picked It
Gold Fields is a South African company with gold mines in Australia, South Africa, West Africa and the Americas.
Sales have been steadily increasing the last few years and analysts expect incremental EPS growth over the next five years.
The stock has a “C” financial health rating and a good solvency ratio.
DRD has the second-highest dividend yield at 3.0% and has the best stock performance over the last five years on the list. The stock is up 394.5% over that time frame and 33.9% over the past 12 months.
Wheaton Precious Metals Corp (WPM)
5-Year Forward EPS Growth Estimate
4.9%
5-Year Trailing Sales Growth
3.4%
Solvency Ratio
1,936%
4.9%
3.4%
1,936%
Why We Picked It
Wheaton Precious Metals is a Canadian company that streams gold and other precious metals. It enters into purchase agreements with mines and then sells the gold.
Because WPM doesn’t actually mine gold, its earnings tend to be more stable than most gold stocks. Analysts expect marginal increases in yearly EPS over the next five years. This includes a small decrease of 1.8% in 2023 and an expected EPS jump of 14.5% in 2024.
It has a financial health grade of “A” from Morningstar and a very strong solvency ratio.
The stock has performed admirably over the last five years, returning 196.4% and 19.5% over the last year, as well as a 1.3% dividend yield.
Alamos Gold Inc. (AGI)
5-Year Forward EPS Growth Estimate
-13.9%
5-Year Trailing Sales Growth
8.9%
Solvency Ratio
171%
-13.9%
8.9%
171%
Why We Picked It
Wheaton Precious Metals is a Canadian company that streams gold and other precious metals. It enters into purchase agreements with mines and then sells the gold.
Because WPM doesn’t actually mine gold, its earnings tend to be more stable than most gold stocks. Analysts expect marginal increases in yearly EPS over the next five years. This includes a small decrease of 1.8% in 2023 and an expected EPS jump of 14.5% in 2024.
It has a financial health grade of “A” from Morningstar and a very strong solvency ratio.
The stock has performed admirably over the last five years, returning 196.4% and 19.5% over the last year, as well as a 1.3% dividend yield.
Harmony Gold Mining Limited (HMY)
5-Year Forward EPS Growth Estimate
n/a
5-Year Trailing Sales Growth
13.0%
Solvency Ratio
65%
n/a
13.0%
65%
Why We Picked It
Harmony Gold Mining is a South African company with mines in South Africa, Australia and Papua New Guinea.
Harmony has minimal analyst coverage, hence the lack of a five-year EPS forecast. What is evident is that the company’s sales have been in an uptrend for a decade, and while earnings can be erratic—as with nearly all gold stocks—the stock itself has performed well.
Over the last five years, HMY has increased 256.7% and 67.9% over the last 12 months, handily outperforming the SPDR Gold Trust which is up 56.0% over the last five years and 10.9% during the last year.
Harmony pays a dividend yielding 0.9% currently. It has a financial health rating of “C” from Morningstar and a healthy solvency ratio.
*All analysis and data are sourced from Trades That Swing, current as of January 5, 2024.
Methodology
Our curated list of the best gold stocks is built using strict criteria. The stocks outlined above are traded on U.S. or Canadian stock exchanges and meet the following requirements:
- Gold revenue. All companies generate at least half of their annual revenue from gold.
- High solvency ratios. All stocks have solvency ratios above 20%. This ratio shows our picks can meet their short-term and long-term financial obligations. Since gold companies may have large debt obligations, the solvency ratio checks to make sure they have enough cash flow to pay those obligations without running into trouble.
- Positive EPS expectations. Analysts expect EPS growth over the next one to five years.
- Increasing sales. The companies had uptrending sales over the last five years, although sales increasing every year isn’t a requirement.
- Strong stock performance. Gold stocks should perform at least as well as gold. Therefore, at the time of compiling, stocks on the list performed at least as well as gold over the last five years, one year and one month.
- Minimum stock criteria. Shares must be listed on U.S. or Canadian stock exchanges, have prices of at least $4 and trade at least 200,000 shares daily.
Dividend yield was not a selection factor, but all the stocks on this list except for one pay a dividend. This helps show the companies have a strong enough financial position to pay a dividend.
Gold is a cyclical commodity, and companies in the industry also tend to generate cyclical results. Their profits rise when gold prices are high and decline when gold is cheap.
If you’re looking to hold gold stocks in your portfolio over the long term, you should be mindful of the industry’s volatile nature.
Note: An experienced financial analyst selected the stocks above, but they may not be right for your portfolio. Before you purchase any of these stocks, do plenty of research to ensure they align with your financial goals and risk tolerance.
What Are Gold Stocks?
Whatever you feel about gold, financial advisors agree that gold stocks can play an important role in a diversified investment portfolio. Gold may or may not be a particularly good inflation hedge, but there’s little doubt that it has held its value over the long term.
Gold stocks are public companies that extract, process, finance and trade gold. The best gold stocks on our list above are focused on either gold mining or gold streaming.
Gold mining is the practice of extracting gold ore from the earth and processing it into gold bullion. Gold streaming is the provision of upfront financing of gold miners in exchange for the option to buy finished gold bullion at a discount in the future.
The share prices of gold stocks do not directly track the day-to-day price of gold in commodities markets, but their revenues are correlated with gold prices. Investors who own gold stocks aim to benefit from changes in the price of gold without having to own or store physical gold themselves.
Advantages of Gold Stocks
- You get exposure to the price of gold without having to own or store physical gold.
- Gold stock prices may not be as volatile as the price of gold.
- They can offer a potential hedge against inflation.
How to Buy Gold Stocks
Investors can purchase gold stocks the same way they purchase any stock for their portfolio.
First, research gold companies and decide how much money you intend to invest in gold stocks. After doing your due diligence, log into your brokerage account.
From your brokerage account, choose the stock you want to buy, the price at which you want to purchase it and how many shares of the stock you wish to own. Once you have decided on these factors, you can purchase the stock. It will join the other investments in your portfolio.
As with any investment, however, it’s always recommended to consult with a financial advisor before making any final decision.
Which Is Better: Owning Gold or Gold Stocks?
Whether you choose to buy physical gold or gold stocks depends upon your own goals and requirements.
If you have the space to store gold and want to own a tangible asset, physical gold may be the better choice. However, if you’re simply looking to profit from changes in gold prices, gold stocks may be a better option. Buying and selling physical gold will typically involve much higher transaction costs than buying and selling gold stocks.
Both physical gold and gold stocks have their own advantages and disadvantages. It’s usually recommended to consult a financial advisor before making any financial decision.
Gold Stock FAQs
What is the best gold stock to buy?
The best gold stock depends on your personal investing goals. Forbes Advisor has provided this list of what we believe to be the best gold stocks to own right now. However, each individual investor needs to examine their own investing approach and risk tolerance before deciding which is the best gold stock for them.
If you’re serious about purchasing gold stocks, discuss your ideas and strategy with a financial advisor.
When should you buy gold stocks?
The goal of purchasing any stock is to buy low and sell high. However, timing the market can be a difficult task. Do your due diligence, consult with a financial advisor and decide when the time is right for you to purchase gold stocks.
Are gold stocks a good investment?
Every investment has advantages and disadvantages—gold stocks are no different. Because of the volatile nature of gold stocks, they are unlikely to be a good investment for novice investors or buy-and-hold investors. It’s recommended that investors interested in purchasing gold stocks do their own due diligence and consult with a financial advisor before making a decision.
As a seasoned financial analyst and enthusiast with a deep understanding of the gold market, let's delve into the information provided in the article on the best gold stocks of January 2024 and related concepts.
1. Featured Partner Offer: Augusta Precious Metals
The article begins with a featured partner offer from Augusta Precious Metals, promoting the opening of a gold IRA with free gold and zero setup, shipping, and insurance fees for up to 10 years. This offer aims to attract individuals interested in investing in precious metals, particularly gold.
2. The Best Gold Stocks of January 2024:
The article lists several gold mining companies along with their market caps, forward EPS growth estimates, trailing sales growth, and solvency ratios. Here are the key companies mentioned:
-
Eldorado Gold Corporation (EGO):
- Operations: Canada, Turkey, Greece
- Strong EPS growth forecast and historical sales growth.
- Financial health rating: "B" from Morningstar.
- Notable price performance: 283.9% over the last five years.
-
Dundee Precious Metals Inc (DPM.TO):
- Operations: Bulgaria, Namibia
- Upward trending sales, strong EPS growth forecast.
- Financial health rating: "A" from Morningstar.
- Solid performance: 214.6% return over the last five years.
-
DRDGold Limited (DRD):
- Operations: South Africa (focus on retreatment)
- Steady sales uptrend, steady EPS growth expected.
- Financial health rating: "C," but with a high solvency ratio.
- Highest dividend yield on the list at 5.8%.
-
Gold Fields Limited (GFI):
- Operations: Australia, South Africa, West Africa, Americas
- Steadily increasing sales, incremental EPS growth expected.
- Financial health rating: "C" with a good solvency ratio.
- Strong performance: 394.5% return over the last five years.
-
Wheaton Precious Metals Corp (WPM):
- Operations: Canadian company involved in streaming gold
- Stable earnings due to gold streaming model.
- Financial health rating: "A" from Morningstar, very strong solvency ratio.
- Admirable performance: 196.4% return over the last five years.
-
Alamos Gold Inc. (AGI):
- Operations: Canada
- Negative EPS growth forecast, but steady sales growth.
- Financial health rating: "A," with a strong solvency ratio.
- Good performance: 196.4% return over the last five years.
-
Harmony Gold Mining Limited (HMY):
- Operations: South Africa, Australia, Papua New Guinea
- Sales in uptrend, minimal analyst coverage.
- Good performance: 256.7% return over the last five years.
3. Methodology:
The article explains the methodology used to select the best gold stocks, including criteria such as gold revenue, high solvency ratios, positive EPS expectations, increasing sales, strong stock performance, and specific stock criteria. This information provides transparency on how the featured stocks were chosen.
4. What Are Gold Stocks?
This section explains the nature of gold stocks, distinguishing between gold mining and gold streaming. It highlights that gold stocks' share prices do not directly track the day-to-day price of gold but are correlated with gold prices. The advantages of gold stocks are also outlined.
5. Advantages of Gold Stocks:
The article enumerates the advantages of investing in gold stocks, emphasizing exposure to gold prices without the need for physical ownership or storage, potentially less volatility than the direct price of gold, and the potential to serve as a hedge against inflation.
6. How to Buy Gold Stocks:
This section provides a concise guide on how investors can purchase gold stocks, including researching gold companies, determining investment amounts, and executing transactions through a brokerage account. It emphasizes the importance of consulting with a financial advisor before making final decisions.
7. Which Is Better: Owning Gold or Gold Stocks?
The article discusses the factors influencing the choice between owning physical gold or investing in gold stocks. It highlights that the decision should align with individual goals and requirements, and it recommends consulting a financial advisor before making such decisions.
8. Gold Stock FAQs:
The FAQs section answers common questions related to the best gold stock to buy, when to buy gold stocks, and whether gold stocks are a good investment. It emphasizes the need for due diligence, consultation with a financial advisor, and acknowledges the volatile nature of the gold industry.
In summary, the article provides a comprehensive overview of the best gold stocks, the methodology behind their selection, the advantages of investing in gold stocks, and guidance on buying and managing gold stocks in a diversified portfolio.
