With gold prices creeping higher again amid macro uncertainties and hopes for (much) lower interest rates in the near future, it’s hard not to find Canada’s top gold mining plays intriguing. Undoubtedly, gold falls short of stocks when it comes to long-term returns.
That said, I view gold as an intriguing hedge for a portfolio that’s already diversified (in stocks and/or bonds and other fixed-income securities). With many investors looking to play gold for a potential breakout, investors may wish to hedge their bets with some of the gold plays while they’re still trading at a relative discount.
Indeed, there are many ways to play gold. You could head to your local gold dealer and purchase physical bullion. But then, you’ll have to ensure it’s securely stored, perhaps paying someone to hang onto your bullion. Personally, I’m a big fan of the mining plays right here while they’re trading at some pretty fair multiples.
Of course, mining plays can be more of a leveraged way to play a “safe” asset. And though the extra volatility (based on moves in gold prices) may not be everybody’s cup of tea, I think that the miners are worth betting on if you seek greater potential rewards.
At this juncture, with gold prices just north of US$2,000 per ounce, I view the top miners as a potentially more value-conscious way to bet on gold. Additionally, you may get paid a fat dividend, depending on which mining stock you select to stash in your portfolio.
Without further ado, let’s look at two gold stocks that I believe are among the best ways to bet on gold for 2024 and beyond.
Agnico Eagle Mines
Agnico Eagle Mines (TSX: AEM) is a wonderful value option, with shares going for around $66 per share. With a magnificent 3.2% dividend yield, AEM stock is also one of the richest yield plays in the gold-mining arena.
So, if you want to get paid to wait for gold to really shine, shares of AEM seem to be the best of the batch. Management has been solid, and past merger and acquisition moves could help unlock additional value for long-term shareholders.
More recently, the firm bought a minority position in Canada Nickel. Indeed, Agnico may be a gold-heavy miner, but gold isn’t the only thing the firm mines. The small investment in Canada Nickel is a relative drop in the bucket for the firm. However, over the long term, I think Agnico Eagle got a great bang for its buck. Either way, AEM stock is a stellar option for Canadian value hunters with an appetite for big passive income.
Barrick Gold
Barrick Gold (TSX: ABX) is another Canadian miner that has a generous dividend yield (sitting at 2.56% right here). The stock has been a choppy ride in recent years but seems too depressed, given how far gold prices have climbed in recent quarters.
Undoubtedly, Barrick stock could catch up in a big way as gold prices look to blast off even higher from here. The $36.9 billion company is quite sizeable and stands out as one of the cheaper ways to expose yourself to gold. Hedge or not, Barrick is a great value play going into February 2024.
