Cameco vs. Barrick Gold: 2 Undervalued Mining Stocks Set to Unearth Gains

Cameco (TSX:CCO) and Barrick Gold (TSX:ABX) are top mining stocks that look to be on sale right here!

| More on:
Nickel ore is mined from the ground.

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There’s a lot of value to unearth in Canada’s mining scene, especially after the latest pullback in various names that, prior to their declines, have rallied considerably on the back of various industry headwinds. Indeed, commodity prices fluctuate, sometimes wildly, and in both directions.

As an investor in the producers or the commodity futures, such rampant volatility has to be dealt with. Indeed, commodity investing isn’t everyone’s cup of tea. However, for those with strong stomachs, I think that betting on the well-run, decently valued miners can help boost your portfolio while providing a great deal of diversification.

Undoubtedly, introducing volatility to a portfolio is only worthwhile if you’re able to increase your shot at lowly correlated gains. Further, the commodity plays tend to swing wildly in both directions, making it opportunistic to be a net buyer following any massive downswing.

Of course, it’s hard to time bottoms, but for the long-term thinkers willing to invest for the longer run (think 10-20 years at a time), buying such plunges can be quite rewarding.

In this piece, we’ll examine two of my favourite Canadian mining companies: uranium producer Cameco (TSX:CCO) and Barrick Gold (TSX:ABX). As we approach the start of the second half, let’s find out which is the better long-term bet.

Cameco

Cameco makes a strong case for why it should be the first commodity producer you look to for long-term growth. Indeed, the return of nuclear power could provide a huge tailwind that could last many years, if not indefinitely. Undoubtedly, nuclear energy is clean and as technologies (think artificial intelligence) advance, the risk and odds of nuclear incidents may very well decrease over time.

Of course, just because sentiment in nuclear power is increasing again doesn’t mean there won’t be another period of hesitancy over the power source. In any case, I think things are looking up for nuclear power. And to fuel the modern nuclear reactions being constructed, Cameco will need to do its part to produce more uranium.

As a top-tier miner with the wind at its back, I wouldn’t dare bet against the firm after its 426% surge in the last five years. If the nuclear renaissance continues into 2030, perhaps similar gains could be in the cards.

Created with Highcharts 11.4.3Cameco PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Barrick Gold

For investors who are looking to do some serious hedging, perhaps Barrick Gold is a shinier bet to make it through today’s uncertain market waters. While the tech sector is blasting off, with investors more than willing to speculate on meme stocks, questions linger as to how the enthusiasm will end.

I have no idea, but the recent pick-up in demand for gold, especially among young people (think millennials), bodes well for the future of the shiny yellow metal.

With gold recently pulling back a bit off its peak, I think the miners represent a great value, especially Barrick stock, which pays a 2.43% dividend yield for investors to wait while gold looks to resume its run after the latest cooldown. Though I wouldn’t back up the truck here, I would seriously consider a starter position after the latest 11% plunge off 52-week highs.

Created with Highcharts 11.4.3Barrick Gold PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Should you invest $1,000 in Ballard Power Systems Inc. right now?

Before you buy stock in Ballard Power Systems Inc., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ballard Power Systems Inc. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Cameco. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Monday, April 7

With a 6.3% weekly loss, the TSX just posted its steepest percentage decline in a single week since June 2022.

Read more »

Stocks for Beginners

Dip Buyers Could Win Big: The Best Canadian Stocks to Buy Now

These two growth stocks have taken hits recently, but their fundamentals remain strong, and their growth prospects are intact.

Read more »

A bull and bear face off.
Stock Market

Bear Market Bargains Emerge as Recession Stocks Return

If you want a deal, then go to the best stocks during a recession market dip.

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Just Might Be the Best Canadian Dividend Stock to Buy in April

Let's dive into a few reasons why Canadian utility giant Fortis (TSX:FTS) still looks like a screaming buy heading into…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »