Precious metals like gold, silver, and platinum have high economic value, and during market crises or economic uncertainties, investors view them as hedges or safe havens, especially gold. Regular investors can’t easily own physical precious metals or the yellow metal, but they have alternatives to gain exposure to them.
The TSX has sound choices today, including three large-cap stocks and a high-flying small-cap mining stock.
Screaming buy
Dundee Precious Metals (TSX: DPM) is a screaming buy. The small-cap stock trades at $9.70 and outperforms its larger industry peers. Current investors enjoy a 51.7% year-to-date gain in addition to the 2.25% dividend yield. This $1.8 billion firm is Canadian, but the mining operations are outside the country.
The precious metals properties are in Bulgaria and Namibia, with exploration activities in Serbia and Bulgaria, too. Dundee’s global portfolio boasts a high-margin production base and attractive growth projects or opportunities. Because of its robust free cash flow, the quarterly dividend has doubled since payouts started in Q1 2020.
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Steady performer
Wheaton Precious Metal (TSX: WPM) is a steady performer despite strong market headwinds. At $61 per share, the stock is outperforming the broader market year to date, up 16.5% versus 1.2% in the year-ago period. If you invest today, the dividend yield is a modest 1.34%.
Income-wise, this $27.6 billion multinational precious metals streaming company delivers. The average net income in the last three years is nearly US$644 million. Market analysts are also bullish, given their 12-month average price target of $75.60 (+23.7%).
The diversified portfolio of high-quality assets comprises 19 operating mines and 14 development projects. Besides operating in countries (Canada, Sweden, and Portugal) with low political risk, Wheaton believes it has a solid foundation for long-term sustainability. The highly diverse asset base and exploration upside assure sustainable dividends.
Industry leaders
For precious metals stock investors looking for stability in the current challenging economic times, Barrick Gold (TSX: ABX) and Agnico Eagle Mines (TSX: AEM) are no-brainer buys. The industry leaders underperform thus far in 2023 but offer peace of mind.
Barrick Gold has a global reach, with operational mines in Argentina, Canada, Cote d’Ivoire, the Democratic Republic of the Congo, the Dominican Republic, Mali, Tanzania, and the United States. The Reko Diq project in Pakistan should begin production in 2028.
One of the crown jewels of this $39.2 billion gold and copper producer is the Pueblo Viejo Mine in the Dominican Republic. The thirteenth largest mine in the world produces more than ounces of gold annually. Only a few mines have that capacity. At $22.33 per share (-2% year to date), you can partake in the 2.44% dividend.
Agnico Eagle Mines is a compelling investment prospect for its robust growth strategy and increasing gold production in lower-risk jurisdictions. The $33.4 billion multinational gold mining company operates in Canada, Australia, Finland, and Mexico. Its exploration and development activities extend to the United States.
At $67.33 per share (-1.89% dividend yield), this top-tier gold stock pays an attractive 3.18% dividend.
Top pick
For people wanting exposure to mining stocks, Dundee Precious Metals is an excellent choice. Its market-beating returns and quarterly dividends make it a top pick today. However, you’ll also get your money’s worth with the large-cap counterparts.
