Mining Investors: Jump on These 3 High-Growth Canadian Gold Stocks

The gold rally continues, with Barrick Gold Corp (TSX:ABX)(NYSE:GOLD) and two other precious metal miners offering considerable upside.

| More on:

High-growth investors may have already cottoned on to the fact that gold stocks are on a tear at the moment, with the rally led by some of the biggest metal and mining tickers on the TSX index. With some indications of good per-asset value (if somewhat wayward P/E ratios) and lots of upside on the way, the following three gold stocks are a great way to invest in the yellow stuff on Canada’s biggest stock market.

Barrick Gold (TSX:ABX)(NYSE:GOLD)

Never mind that Barrick Gold’s growth of earnings shrank by 130.4% in the past 12 months — its five-year average past earnings growth of 61.4% shows that a tough year didn’t put too much of a dent in this metal and mining stock’s outlook. Indeed, with a 40% expected annual growth in earnings on the way, Barrick Gold is looking like it may defy gravity for some time.

A negative P/E ratio leaves an accurate valuation up to a P/B of 1.6 and overvaluation by twice the future cash flow value. If you’re not too worried about intrinsic value, you may just want to buy for the upside. A so-so debt level of 53.8% of net worth indicates that there’s not too much to be worried about lurking in this company’s balance sheets, and there’s a dividend yield on offer of 1.32%, even if it’s not significantly high. Meanwhile, if you like to go by the confidence of those in the know, Barrick Gold has seen considerable levels of inside buying throughout the last 12 months.

Lundin Mining (TSX:LUN)

Though Lundin Mining’s past-year earnings growth shrank by 22.5%, its five-year average of 20.1% shows that it’s on a generally upwards trajectory. A 27.8% expected annual growth in earnings puts Lundin Mining back on this skyward track, making for a strong play if upside is your thing. In terms of inside buying, more shares have been bought than sold in the last three months, which is a great sign if you put any faith in the sentiments of insiders.

Goldcorp (TSX:G)(NYSE:GG)

Up 7.21% in the last five days, Goldcorp stock is enjoying the January gold rally, inching up from a hold to a moderate buy with today’s stats. While value may not be the big draw here, there’s more upside on offer, so let’s take a quick look.

A P/E of 116.4 times earnings makes a strange bedfellow with an industry-beating low P/B of 0.6 times book. A PEG of 1.4 likewise suggests that this stock is valued about where it should be. Goldcorp’s dividend yield of 0.78% is low, but at least it’s paying one. Meanwhile, a 84% expected annual growth in earnings makes this one of the most exciting mining stocks on the TSX index.

The bottom line

Lundin Mining looks the best buy, and it’s good value for money at the moment. There are lots of indications that back this up: look at a P/E of 10.7 and P/B of 0.9, for instance, as well as a discount of 31% against the future cash flow value. A trailing dividend yield of 2% gives investors a reason to stick around, while a satisfactory level of debt at 10.3% of the company’s net worth should reassure risk-averse investors that it’s safe to do so.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.

More on Stocks for Beginners

woman looks out at horizon
Stocks for Beginners

Here’s How Much Canadians at 35 Need to Retire

If you want to create enough cash on hand to retire, then consider an ETF in one of the safest…

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Watch Out! This is the Maximum Canadians Can Contribute to Their RRSP

We often discuss the maximum TFSA amount, but did you know there's a max for the RRSP as well? Here's…

Read more »

a person looks out a window into a cityscape
Dividend Stocks

1 Marvellous Canadian Dividend Stock Down 11% to Buy and Hold Immediately

Buying up this dividend stock while it's down isn't just a smart move, it could make you even more passive…

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Dividend Stocks

CPP at 70: Is it Enough if Invested in an RRSP?

Even if you wait to take out CPP at 70, it's simply not going to cut it during retirement. Which…

Read more »

worry concern
Stocks for Beginners

3 Top Red Flags the CRA Watches for Every Single TFSA Holder

The TFSA is perhaps the best tool for creating extra income. However, don't fall for these CRA traps when investing!

Read more »

Data center woman holding laptop
Dividend Stocks

Buy 5,144 Shares of This Top Dividend Stock for $300/Month in Passive Income

Pick up the right dividend stock, and investors can look forward to high passive income each and every month.

Read more »

protect, safe, trust
Stocks for Beginners

2 Safe Canadian Stocks for Cautious Investors

Without taking unnecessary risks, cautious investors in Canada can still build a resilient portfolio by focusing on safe stocks like…

Read more »