The Motley Fool

3 Top Gold Stocks to Buy While They’re Cheap

Image source: Getty Images

There’s no question that stocks have continued to perform well this year. The market continues to rally and reach new highs. However, one of the few industries that’s underperformed, offering some top stocks to buy today, is gold.

It’s understandable that with so many other stocks rallying, investors are ignoring gold to look for higher growth opportunities.

Gold is extremely cheap now, though, and it won’t be this cheap forever. So, although it’s out of favour, now is the perfect time to be adding to your portfolio.

Long-term investors know the ups and downs of markets create the best opportunities to buy stocks. We saw this as recently as last year when the market corrected, and plenty of the best stocks traded extremely cheap.

Today, with markets reaching all-time highs, though, and most industries trading at or above their fair value, taking advantage of this selloff in gold is ideal if you want to make the best long-term investment possible. So, here are three of the best stocks to consider.

A top growth stock

One of the first stocks I’d consider buying today while gold stocks trade at a massive discount is Equinox Gold (TSX:EQX).

Equinox may be the cheapest gold stock in Canada right now. For weeks, it has consistently been hitting new 52-week lows. So, although it’s a top Canadian gold stock and currently offering a tonne of value for investors, you may want to watch it a bit longer before you buy, as you don’t want to catch a falling knife.

The stock is exceptionally cheap, though, down more than 55% from its 52-week high. So, this ultra-cheap price is making Equinox the perfect stock for long-term investors, even for those who don’t have that long a timeline, since much of Equinox’s growth is expected over the next few years.

The company only began producing gold in 2018 and continues to increase production or find high-quality acquisitions to add to its portfolio.

So, if you’re looking for a stock that’s cheap today but also offers a tonne of growth potential going forward, Equinox is the top Canadian stock to keep your eye on over the coming weeks.

The best senior gold producer to buy now

Another high-quality Canadian gold stock to keep your eye on right now is Kirkland Lake Gold (TSX:KL)(NYSE:KL).

Kirkland Lake is a massive $13 billion large-cap gold stock. And like many of its gold stock peers, the stock has been getting mighty cheap lately. As of Monday morning, it was trading roughly 33% off its 52-week high.

That’s a significant discount but nowhere near the discount that Equinox is offering. One of the reasons for this is because Kirkland Lake is a lot larger and more established.

Kirkland lake is the ideal gold stock if you want a senior producer to hold for the long run. With gold companies, the larger the business and its operations, typically, the less volatile it is. This is clear by the discount Kirkland Lake is offering compared to Equinox.

33% off its high is still ideal for investors today. But it also shows it’s a lot less volatile than a growth stock like Equinox, which is down over 50%.

So, if you’re looking to buy gold to stabilize your portfolio and act as a hedge against inflation, Kirkland Lake is probably your best bet.

A top gold stock for dividend investors

Lastly, another incredibly cheap gold stock for investors to consider today is B2Gold (TSX:BTO)(NYSE:BTG).

B2Gold has some impressive operations with low costs that allow the stock to be a major cash cow.

Much of the reason gold stocks have sold off recently is that the underlying commodity has lost value. And while it’s never ideal that the commodity you sell loses value, for B2Gold, at these prices, it’s still making a major profit.

Even in its most recent quarter, with revenue down due to lower gold prices, B2Gold still earned an incredible profit.

That’s why it’s the perfect gold stock for dividend investors. Not only are its operations highly stable and have great margins, but the company is returning tonnes of this cash to shareholders.

Today, its dividend yields roughly 4%, incredible for a gold stock. So, if you’re looking to take advantage of these discounts today, B2Gold is a top choice.

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 Daniel Da Costa owns shares of B2GOLD CORP. The Motley Fool has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.