2 Gold Stocks to Help Your RRSP Weather the Storm

Agnico-Eagle Mines Ltd. (TSX:AEM)(NYSE:AEM) and Kirkland Lake Gold Inc. (TSX:KL)(NYSE:KL) have operational excellence in a sector that provides a safe haven in difficult economic times. They’re perfect choices for your RRSP today.

| More on:
Gold king in chess game face with the another silver team on black background (Concept for company strategy, business victory or decision)

Image source: Getty Images

It’s always difficult when we have to watch our portfolios experience declines and a loss of value. But if you are well diversified, you are somewhat sheltered from the storm, because a well-diversified portfolio of holdings is designed to do just that.

With the markets becoming increasingly jittery and seeing continued downward pressure, gold stocks are a good place to park your money for calm in the storm. Protect your RRSP portfolio by adding gold stocks.

Because gold stocks are necessary for proper portfolio diversification, as gold exposure acts as a safe haven in difficult economic times and moves counter to many of the other sectors.

Without further ado, here are two gold stocks that are well positioned to be your safe haven, thereby preserving the value in your RRSP portfolio.

Agnico-Eagle Mines (TSX:AEM)(NYSE:AEM)

With the lowest-risk profile of the group, this $13 billion company has the well-deserved reputation of being a best-in-class operator with a strong future.

In this increasingly jittery market, the company’s assets that are in low-risk, politically safe areas such as northwestern Quebec, northern Mexico, Finland, and Nunavut, and exploration activities in Canada, Europe, Latin America and the United States, are a big selling point for stock.

And this quality gold company has been a consistent top performer, with solid operational performance and an industry-leading cost structure, and this has driven consistently better-than-expected results.

Kirkland Lake Gold (TSX:KL)(NYSE:KL)

Kirkland Lake Gold stock has been the star of the gold sector, returning 520% since the beginning of 2017, 27% year to date, and still going strong.

And Kirkland’s first-quarter 2019 results showed investors why.  Results were above expectations and guidance was increased.

Compared to the first quarter of 2018, production increased 57% to 231,879 ounces, operating cash flow increased 95%, and free cash flow increased 85% to $93.1 million.

And with mines in Canada and Australia, Kirkland also represents a lower-risk way to play the gold space.

While the dividend is nothing to write home about, it was increased by approximately 34% recently, and the dividend yield is now 0.5%. This is a testament to management’s confidence in the company and its future.

The balance sheet remains healthy, with a cash balance of $416.1 million — 25% higher after this record- breaking first quarter.

In summary, Kirkland Lake Gold is a high-quality stock that has shown operational excellence and that can be expected to continue to see strong production growth, decreasing costs, and a rising dividend.

Final thoughts

The gold sector is a good bet in a market under pressure. Add these gold stocks for a safe haven that provides downside protection.

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 Karen Thomas has no position in any of the stocks mentioned.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »