Alongside tech and Canadian cannabis stocks, mining has to be one of the best sectors on the stock market for high expected annual growth in earnings. From popular gold miners to some of the best known silver miners, with some lithium thrown in for good measure, here are six of the top high-growth metals and mining stocks on the TSX index.
Rising since the end of October, Goldcorp’s 90-day returns beat the TSX index and the Canadian metals and mining industry. Trading at book price, it’s not too badly valued for a high-growth stock, though Goldcorp insiders have sold a considerable volume of shares in the past three months.
While a five-year average past earnings growth of 23.8% is solid, and an unusual dividend yield of 0.74% is on the table, the real draw here is a high118% expected annual growth in earnings.
Barrick Gold (TSX:ABX)(NYSE:GOLD)
Selling at twice the book price, Barrick Gold is the inverse of Goldcorp, with more shares having been bought than sold by insiders in the last few months at a high volume. A small dividend yield of 1.22% is on offer, while a strong track record (see a five-year average past earnings growth of 56.6%) is underlined by a significant 69.7% expected annual growth in earnings.
Wesdome Gold Mines (TSX:WDO)
On the rise since May, Wesdome Gold Mines’ sizeable 157.7% year-on-year returns is bested only by its five-year returns of 450%. While shareholders loyal for this long should now be celebrating, newcomers should mull a 44.8% expected annual growth in earnings – though they will have to look past overvaluation, signified by a P/E of 40.8 times earnings and P/B of 3.9 times book.
Lithium Americas (TSX:LAC)(NYSE:LAC)
A top choice for high returns, Lithium Americas saw 90-day returns of 138.4%. An expected 40.9% annual growth in earnings is on the cards, with a strong recent track record (signified by a one-year past earnings growth rate of 20.5%) suggests that this is feasible. More shares have been bought than sold by Lithium Americas insiders over the past 12 months.
Fortuna Silver Mines (TSX:FVI)(NYSE:FSM)
Trading at book price, Fortuna Silver Mines can boast a five-year average past earnings growth rate of 58.9%. Its balance sheet is clean, with a low debt level at 13% of net worth, and with good value for money indicated by a P/E of 18.3 times earnings, growth investors have a modest 19.9% expected annual growth in earnings to consider.
Silvercorp Metals (TSX:SVM)(NYSE:SVM)
On the rise since late November, Silvercorp Metals looks much like the previous stock, with a five-year average earnings growth rate of 53% and a clean balance sheet. Attractively valued with a P/E of 11 times earnings and P/B of 1.3 times book, there has been some inside selling over the last 12 months. Passive income investors may not get too excited over a dividend yield of 0.96%, nor growth investors over a 6.3% expected annual growth in earnings.
The bottom line
TSX index investors looking for solid returns or high momentum might want to give the concluding stock a miss, focusing instead on the kind of high growth and sizeable returns on offer by the likes of Goldcorp, Lithium Americas, and Wesdome Gold Mines.
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.