The year 2020 is a new era for gold stocks and gold prices. After a long period of weak and uninspiring gold prices, today the industry is booming. The price of gold has risen above $2,000 for the first time ever. It is up 36% in 2020 and up 365% in the last fifteen years.
And of course, gold stocks have followed suit. The S&P 500 Gold Sub Index has soared 66% in 2020, and Canadian gold stocks are on a tear. Doubling your money with gold stocks is a real possibility today. Gold continues to be the safe haven that investors are flocking to and cash flows are rising in the sector. Here are the three gold stocks to buy to double your money.
Double your money with Agnico Eagle Mines stock
Agnico Eagle Mines Ltd. (TSX:AEM)(NYSE:AEM) is a top gold stock that is already soaring. In 2020, this stock has risen 37%. As one of the safest gold companies out there, Agnico Eagle Mines stock is a smart way to combat the high-risk environment we live in today.
In 2021 and beyond, production will accelerate as expansions continue. Free cash flow will also accelerate, resulting in significant dividend increases. When I talk about doubling your money, I am referring to total return. Total return includes dividends. Along with capital gains, these dividend increases will allow Agnico Eagle Mines stock to help achieve your goal of doubling your money.
Kirkland Lake Gold: Up 32% in 2020
At $12.2 billion, Kirkland Lake Gold Ltd. (TSX:KL)(NYSE:KL) stock is a gold company that has excelled in the last few years, and it will continue to thrive as gold continues to rally higher. Kirkland Lake Gold stock has already doubled investors’ money since I first recommended it in 2019. Expect more of this outperformance as we head into 2021.
In its latest quarter, Kirkland Lake reported a doubling of revenue and a doubling of net income. The company also reported free cash flow of $226.7 million. Furthermore, the dividend was doubled. Operating in Canada and Australia, Kirkland Lake Gold has one of the safest political risk profiles in the gold sector and the mining sector in general. The company also has some of the highest grade gold mines in the world.
Growing low-cost production, industry-leading profitability and cash flow are key strengths. And a strong track record make Kirkland Lake Gold stock a buy today. Looking ahead, declining costs, soaring cash flows, and future dividend increases will support this stock as it continues to benefit from rising gold prices.
Barrick Gold stock: Up 68% in 2020
At the time of writing, Barrick Gold Corp. (TSX:ABX)(NYSE:ABX) stock is up strong in 2020. Those who bought this stock in 2019 almost doubled their money already. But there is plenty of room to move even higher. This gold stock is typically the gold stock that major investors flock to for gold exposure.
After years of overspending and poor returns, Barrick finally got serious about improving operational efficiency and financial performance. The company targeted annual cost savings, divested of underperforming mines, and took action to drive value creation.
Barrick’s $18 billion merger with Rangold was one of the mining industry’s biggest ever mergers, creating the world’s biggest gold mining company. It is driving economies of scale, better profitability, and greater diversification.
Barrick’s second-quarter results will be released on August 10. Results will show strength as gold prices continued to strengthen, boosting Barrick Gold stock.
Foolish bottom line
The gold trade is just starting. Gold companies will be awash in cash in the coming years, and this will accelerate their stock price performance. If you have $5,000 today, get exposure to this trade. Consider investing in these three gold stocks to double your money.
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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 owns shares of AGNICO-EAGLE MINES LTD.