Gold has proven its value time and again. Last year, gold revived several portfolios from the economic turmoil that we went through. However, gold has not been performing well lately. Its lustre appears to be losing its value with long-term investors, as growth stocks are revived as the investment of choice for many investors right now.
Accordingly, now may be the time to start considering some out-of-favour gold miners right now. Here are two of the best gold miners in Canada with tremendous upside today.
Kirkland Lake Gold
As far as Canadian gold miners go, Kirkland Lake Gold (TSX:KL)(NYSE:KL) is certainly one of the best. This company’s diversified and high-quality mining operations are some of the best among its mid-cap peers. Indeed, the company’s focus on friendly mining jurisdictions and gold mines with high-grade deposits provides some of the highest margins in the sector. For investors in this gold miner, that’s a great thing.
Indeed, from a fundamentals perspective, there’s a lot to like about Kirkland Lake. The company’s balance sheet is among the strongest of its peers. Kirkland Lake has essentially no debt and significant cash reserves.
To date, Kirkland Lake’s management team has been using this cash to bolster its dividend. Indeed, returning value to shareholders is great. However, there are some expectations Kirkland Lake could be in the search for another gold mine. After all, the company will need to replace some of the high-grade production from one of its Australian mines, which is nearing the end of its useful life.
At roughly $38 per share at the time of writing, Kirkland Lake is a steal. In fact, this could be one of the most undervalued miners on the market right now.
Another great gold miner investors should consider is Equinox Gold (TSX:EQX). Similar to Kirkland Lake, this gold miner’s production is located in favourable jurisdictions and is high grade in nature.
In fact, there are a lot of similarities between the two companies. However, Equinox is more exposed to the U.S. mining market, so this miner provides some extra diversification for investors seeking options outside Canada and Australia.
The company’s expansion plans are also bullish for investors who believe gold prices are set to rise. Equinox has a plan to nearly double production over the next few years. Accordingly, this stock is really a higher-leverage bet on where investors see precious metals prices two or three years from now.
Both companies offer excellent risk/reward fundamentals. And similar to Kirkland Lake, Equinox’s balance sheet is rock solid. Accordingly, there’s a lot to like about these two miners right now.
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.
The Motley Fool has no position in any of the stocks mentioned. Fool contributor Chris MacDonald has no position in any stocks mentioned in this article.