3 Soaring Mining Stocks to Buy in 2020

Canadian investors could consider buying TSX mining stocks like Yamana Gold (TSX:YRI)(NYSE:AUY) before the end of 2020.

| More on:
diamonds, hidden gems

Image source: Getty Images

Investors have turned to gold during the COVID-19 pandemic on inflation and recession fears. Shareholders see gold as a good way to protect their savings in this time of uncertainty. Notably, Warren Buffett made a large investment in a gold stock this year.

If you are thinking about buying gold stocks on the Toronto Stock Exchange, there are some good options. Here are three mining stocks that you might consider buying before 2020 ends.

Yamana Gold: Increased annual dividend by 50%

Yamana Gold (TSX:YRI)(NYSE:AUY) surged from a 52-week low of $3.11 to a 52-week high of $9.29. After the March 2020 market sell-off, when the price of gold hit historic 10-year highs, mining stocks like Yamana performed very well on the TSX. As of Thursday, the stock is trading for $7.22 per share.

Yamana Gold produces both gold and silver ores in South America and Canada. The annual dividend yield is decent at 1.94%. What’s more, the company recently increased its dividend by 50%.

On October 29, Yamana Gold announced stellar earnings for the third quarter of 2020. Its operating cash flows of $215 million are the highest since 2015. Moreover, year-over-year free cash flows are up over 300%.

Even better: Net debt declined by $148.9 million. Yamana Gold is a company with strong commitments to providing shareholders with top value. If you are looking for a gold stock to buy before the year ends, Yamana Gold is a solid option.

First Quantum Minerals: Gross profit rose by over 100%

First Quantum Minerals (TSX:FM) rose from a 52-week low of $4.71 to a 52-week high of $17.43 after the March 2020 market sell-off. At the time of writing, the stock is trading for $15.64 per share. The annual dividend yield is relatively insignificant at 0.06%.

First Quantum Minerals develops copper, nickel, gold, and zinc ores in South America, Europe, Australia, Africa, and the Middle East.

First Quantum reported earnings for the third quarter of 2020 on October 28. Like Yamana, First Quantum has also been paying down debt to reduce debt-servicing expenditures. The company also increased its gross profit to $346 million from $150 million.

Because First Quantum pays such a low dividend yield at its current price, investors are probably better off buying into other gold stocks. This isn’t necessarily a bad option, but there are equally as successful mining companies paying larger dividend yields.

Lundin Mining: A top mining stock to buy

Lundin Mining (TSX:LUN) rose from a 52-week low of $4.08 to a 52-week high of $9.12 after the March 2020 market sell-off. At the time of writing, the stock is trading for $8.72 per share. The annual dividend yield of 1.83% is low, but notable.

Lundin Mining mines copper, lead, zinc, nickel, silver, and gold in South America, the United States, and Europe.

This mining stock announced third quarter of 2020 earnings on October 29. The company also saw an increase in gross profit from $128.6 million in 2019 to $199.3 million in 2020.

The increase in earnings is smaller than that of First Quantum Minerals. Nevertheless, Lundin both increased its cash and decreased its debt this year. Its cash stood at $220 million with its debt at $124 million at the end of the quarter.

Marie Inkster, CEO of Lundin Mining, had this to say about the firm’s financial results:

“Operationally, noticeable progress has been made at Candelaria to improve overall mill throughput. The operation is well positioned for a return to full production rates once fair and sustainable labour agreements are reached. Chapada’s strong performance continued until late in the quarter. The team has done an excellent job to minimize the expected impact and to take advantage of the downtime, as seen by reinstated 2020 guidance.”

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 Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

4 Ways to Grow $100,000 Into $1 Million in Retirement Savings

Anyone can build a million-dollar retirement portfolio. Here are four ways you could practically grow $100,000 to $1 million.

Read more »

A shopper makes purchases from an online store.
Dividend Stocks

3 Reasons to Buy TFI Stock Like There’s No Tomorrow

TFI stock (TSX:TFII) had a hard 2023, but now it's set up for a solid 2024, with an acquisition that…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

5 Secrets of TFSA Millionaires

These lesser-known secrets can help you set up the perfect long-term portfolio and achieve a million-dollar TFSA!

Read more »

analyze data
Dividend Stocks

How to Build a Powerful Passive-Income Portfolio With Just $20,000

These fundamentally strong TSX stocks have paid and increased their dividend in all market conditions. Add these stocks to build…

Read more »

Canadian stocks are rising
Dividend Stocks

iShares S&P/TSX Capped REIT Index ETF (TSX:XRE): Why I Like this ETF Better Than a Rental Property

XRE is a great ETF for gaining exposure to the Canadian real estate sector.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 High-Yield Dividend Stocks That Pay Cash Every Month

These three dividend stocks all offer high yields and have sustainable dividends, making them some of the best investments to…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

3 Stocks That Could Create Lasting Generational Wealth

If you want to start transferring over your wealth, you'll need to actually have some! And these are three stocks…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Down by 25%: Is Canadian Tire Stock a Buy in February 2024?

Take a closer look at this Canadian retail stock if you are looking for low-cost additions to your self-directed portfolio…

Read more »