3 Discounted Gold Stocks to Buy Now

Gold stocks, especially at their current discounted state, can be promising short-term investments, since they can reverse course anytime due to market dynamics.

| More on:
gold stocks gold mining

Image source: Getty Images

The TSX is down about 8.2% right now, which is less than the S&P 500 and NASDAQ, but it’s still quite a dip. Inflation is at an all-time high, and combined with a probability of a recession, it’s pointing towards a good investment opportunity: buying gold stocks. Right now, most gold stocks are heavily discounted.

Still, as more focus shifts towards them, the more rapidly they are likely to rise in the coming weeks, offering you decent capital appreciation.

A mid-cap gold stock

Centerra Gold (TSX:CG) is a Toronto-based gold mining company with a market cap of around $3 billion. It primarily operates in North America but also has a presence in Turkey. The local reserves (in Canada) are adequately substantial for a miner. Its size and its foreign interests are pretty promising as well. Apart from gold, the next largest reserves the company holds are copper.

The stock initially peaked around the Great Recession. After a massive fall between 2012 and 2013, the stock experienced a steady rise for the next five years. It has been quite cyclical in the last five years, rising and falling by substantial margins. It has fallen by about 42% from its post-pandemic peak and is ripe for a bull run if gold gets the limelight.

A large-cap gold stock

If you are looking for discounted giants in the Canadian gold mining sector, Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a senior gold mining company that has been operating for over six decades. It has an extensive operations portfolio with mines in three countries: Canada, Mexico, and Finland. Most of the company’s operational mines are in Canada.

Agnico is a smart investment not just because of its extensive 37% discount from its 2020 peak but also because of the dividend. Thanks to the recent fall, the stock is currently offering a decent yield of 2.9%. If it falls a little further and the recovery potential takes it to or beyond its 2020 peak, it might double your money in a couple of years.

A small-cap gold stock

Dundee Precious Metals (TSX:DPM) has an entirely foreign portfolio. It has mining operations in Namibia and Bulgaria. The exploration assets are also offshore in Bulgaria and Serbia. The amount of proven and probable reserves is comparable to much larger companies (by market cap). The company has also diversified its portfolio through strategic investments in other gold companies.

It’s the only gold stock on that list that experienced relatively stable and consistent growth in a few years preceding the 2020 crash. Its decline of almost 27% has also been fairly consistent. It’s also quite attractively valued with a price-to-earnings ratio of 5.1, and in addition to its capital-appreciation potential, it’s also offering a decent 2.6% yield.

Foolish takeaway

Even if a full-blown market crash is not around the corner, gold stocks can be decent additions to your portfolio. Some serve as a strong hedge against inflation, while others can offer decent long-term growth potential. While the dividends are not exactly rare for gold stocks, the yields are usually low. An over 2.5% yield from a gold stock can be considered decent enough.

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 recommends CENTERRA GOLD INC.

More on Metals and Mining Stocks

silver metal
Metals and Mining Stocks

Silver Surge: 2 Mining Stocks to Play the Recent Rally

Pan American Silver (TSX:PAAS) stock and another top value play to ride the silver bull run.

Read more »

gold stocks gold mining
Metals and Mining Stocks

With Gold Soaring, Here’s 1 Mining Stock I’d Buy Now

Barrick Gold (TSX:ABX) stock could continue to move higher as the precious metal skyrockets in 2024.

Read more »

silver metal
Metals and Mining Stocks

Why Endeavour Silver Stock Jumped 10% on Friday

Endeavour (TSX:EDR) stock rose significantly last week after earnings that blew past estimates and a drawdown that means more growth.

Read more »

Metals
Stocks for Beginners

Steel Is in Demand: 2 Canadian Stocks That Should Benefit

Steel stocks are making a comeback, with 2024 and 2025 marked as huge years for the industry. And these two…

Read more »

Dice engraved with the words buy and sell
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell, or Hold?

Teck Resources is a Canadian mining stock that likely has a bright future due to the company's focus on copper.

Read more »

Paper airplanes flying on blue sky with form of growing graph
Tech Stocks

2 Soaring Stocks I’d Buy Now With No Hesitation

Sure, these soaring stocks have already climbed by immense amounts. But I would all but guarantee these companies have more…

Read more »

Gold bullion on a chart
Metals and Mining Stocks

If Gold Prices Continue to Climb, These 3 Stocks Could Skyrocket

Not all gold stocks might ride the sector-wide bullish momentum similarly. Some might catapult to new heights, while others may…

Read more »

A worker wears a hard hat outside a mining operation.
Metals and Mining Stocks

1 Canadian Mining Stock to Buy and Hold Forever

Here's why investors can consider investing in this blue-chip TSX mining stock right now.

Read more »