3 Stocks to Avoid if You Want to Retire

You are better off leaving these three stocks, including OceanaGold Corp (TSX:OGC), to insiders and psychics who can better predict which way the share price will go.

| More on:
Path to retirement

Image source: Getty Images

Equally as important as what you put in your retirement portfolio, aspiring Canadian retirees should be aware of which stocks to avoid purchasing. These investors may want to stay away from First Quantum Minerals (TSX:FM), Cameco (TSX:CCO)(NYSE:CCJ), and OceanaGold (TSX:OGC).

These stocks offer hardly any dividends and more volatility than they are worth. You are better off leaving these three stocks to insiders and psychics, who can better predict which way the share price will go.

First Quantum Minerals

Rumours of merger talks have First Quantum Minerals stock up to $10.83 as of Monday morning. First Quantum is in discussions with Jiangxi Copper to sell a minority interest in First Quantum’s Zambian copper assets. With negotiations incomplete, a mutually beneficial transaction may not take place.

First Quantum Minerals also denied talk of a takeover bid. The corporation claims that no potential takeover bids are coming down the way as far as company leadership is aware. Canadian investors who want to add copper stock to their portfolio may want to avoid this stock, as shareholders may react negatively to the minority interest sale.

This stock is too volatile. The share price rose from 2004 until it hit about $20 per share in 2007 before it sharply began falling. At a dividend yield of under 1% of the current share price, aspiring retirees should stay away from First Quantum.

Cameco                                                                         

The Ux Weekly president Jonathan Hinz interviewed the president and CEO of Cameco, Tim Gitzel, on the future of uranium production in September. Canadian Cameco is the largest producer of uranium in the world at 18% of the world’s supply.

Tim Gitzel spoke about his struggle to lead this industry after the 2011 Fukushima disaster. Uranium corporations like Cameco struggled with weakening demand for nuclear energy, leading to excess supply. Desperate suppliers then pushed prices down, shrinking profit margins for other firms in the industry, including Cameco.

Today, demand has returned to normal levels. Canadian investors, however, should be aware that this is a low dividend payer at 0.63% of the current $12.69 share price. Dividend investors may find that the returns to uranium output on the TSX are small in terms of both capital gains and dividends.

OceanaGold

The government of the Philippines are giving OceanaGold some difficulty regarding its Didipio mine, but things may be turning around. In July, the provincial government of Nueva Vizcaya has denied OceanaGold’s injunction request to end the restraint of Didipio gold and copper exploration.

The stock is still up 13% for the month on news that the Philippine government Mines and Geosciences Bureau gave OceanaGold interim renewal of its Financial or Technical Assistance Agreement. This stock provides investors with a 0.74% dividend at its current price of $3.62, lower than the 3.95% prime interest rate in Canada.

In 2009, the price on OceanaGold’s shares collapsed to a low around $0.25 per share. In July 2016, the stock hit a record high of $5.34 since 2007. Canadian investors who think OceanaGold will help them retire should look elsewhere. When it comes to gold, investors would be wiser to buy and store the actual metal in a recession — not low dividend stocks.

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 Debra Ray has no position in any of the stocks mentioned.

More on Stocks for Beginners

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Stocks for Beginners

3 TFSA Hacks That Could Make You a Millionaire

Do you want a $1 million without worrying about the tax bill? These TFSA hacks could help you become a…

Read more »

Early retirement handwritten in a note
Stocks for Beginners

These 2 TSX Growth Stocks Could Help You Retire Early

Buying these two TSX growth stocks can help you retire early by multiplying hard-earned savings in the long run.

Read more »

Technology
Stocks for Beginners

The Best Stocks to Invest $1,000 in Right Now

Want a great starter portfolio? Here’s a list of the best stocks to invest $1,000 in right now for long-term…

Read more »

green energy
Energy Stocks

1 Magnificent TSX Dividend Stock Down 37% to Buy and Hold Forever

This dividend stock has fallen significantly from poor results, but zoom in and there are some major improvements happening.

Read more »