These 3 Gold Stocks Should Be on Your Radar in 2022

If you believe that a correction is due in 2022 and the market will dip within the year, gold is one asset that should be in your portfolio.

| More on:
stock market

Image source: Getty Images

The TSX bullish phase will not last forever. Even if the index doesn’t see a major crash as it did in 2020, a correction is long due, thanks mostly to the powerful growth phase the market has seen in the last couple of years. The two-year post-pandemic growth (if we judge based on the composite index) is far stronger than several years of pre-pandemic growth.

Whether it’s a correction or a crash, if a dip is coming, then gold should be your asset of choice. And there are three gold stocks you can look into for gaining exposure to this precious commodity.

World’s largest gold mining company

If you are betting on any commodity, going with the largest player is perhaps the safest choice. And with Newmont (TSX:NGT)(NYSE:NEM), you don’t just invest in the largest gold mining company in North America but a global leader. While the company is listed here in Canada as well, it’s headquartered in the United States. Its TSX listing is quite recent, while it has been listed on NYSE for over eight decades.

Newmont has mining operations in four continents: North and South America, Australia, and Africa, but the bulk of its output is from the Americas. Only one other company (Barrick Gold from Canada) comes relatively close to Newmont’s production output; the rest are far behind.

The third-largest producer didn’t even produce half as much gold as Newmont did in 2021. Apart from relatively stable growth (for a gold stock), it also offers healthy dividends.

A precious metal streaming company

As one of the world’s largest gold streaming companies, Wheaton Precious Metals’ (TSX:WPM)(NYSE:WPM) competitive advantage is almost as pronounced as Newmont’s, with one major exception. As a streaming company that exchanges rights to buy gold at a set price for an upfront financial investment, it’s not as exposed to the headwinds that affect gold mining companies.

This less risky exposure to gold as an asset class appeals to many investors. But even though it’s less exposed to the sector’s dynamics, the stock has mostly been cyclical in nature. In the last five years, it has gone through two growth phases: 109% growth pre-pandemic and 117% post-pandemic growth.

If you buy the dip and wait long enough, your chances of doubling your capital with this streaming giant are quite high.

An undervalued mining company

Centerra Gold (TSX:CG) is a Toronto-based gold mining company with domestic and international operations. It produces both copper and gold, though the latter is the highlight of the company’s output. Its local operations are in B.C., and its international projects are in the U.S. and Turkey.

Canterra Gold is mostly a good pick for its cyclical growth potential because even though it offers dividends, the 2.2% yield is not compelling enough for most dividend investors. It’s a good yield compared to the rest of the sector, however.

As for the growth potential, the stock follows the pattern of other mining giants, but since it’s relatively lighter (smaller market cap), the growth seems more pronounced. For example, its two growth phases (parallel to the rest of the sector) in the last five years pushed the stock up over 150%.

Foolish takeaway

Like most other gold stocks, these three should be on your radar, especially if we enter a bear market phase, because gold, as an asset, shines the brightest when the broader stock market is performing poorly.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Stocks for Beginners

Cameco Stock and More: 3 TSX Commodity Titans to Watch in 2024

Cameco stock and these others will provide you with growth that goes beyond just a year or two, with all…

Read more »

Handwriting text writing Are You Ready For Tomorrow question. Concept meaning Preparation to the future Motivation Stand blackboard with white words behind blurry blue paper lobs woody floor.
Stocks for Beginners

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

Lundin stock (TSX:LUN) has been killing its production of copper and plans on blowing its records out of the water…

Read more »

Gold bars
Stocks for Beginners

TSX Materials in March 2024: The Best Stock to Buy Right Now

Materials have been quite volatile, though the price of gold has surged to all-time highs. That makes this stock a…

Read more »

Gold bars
Metals and Mining Stocks

Will Gold Stocks Rally in 2024?

Down almost 30% from all-time highs, Franco-Nevada is a gold mining stock trading at a discount to consensus price target…

Read more »

A miner down a mine shaft
Stocks for Beginners

Canadian Mining Stocks: Buy, Sell or Hold?

Canadian mining stocks have seemed like such a strong investment, but with shares down significantly this year, what should we…

Read more »

Gold king in chess game face with the another silver team on black background (Concept for company strategy, business victory or decision)
Stocks for Beginners

Great News for Gold Stock Investors!

Gold has hit an all-time high! Which is good news for some gold stocks, and really good news for others.

Read more »