Is it Too Late to Buy Gold Stocks?

Investing in precious metals and, by extension, gold stocks is a way that investors have looked to store wealth for centuries. During times of market volatility, investors flock to precious metal stocks, and that, in turn, provides a lift to precious metals.

Given that precious metals are already surging this year, is it too late to buy gold stocks?

Let’s try to answer that question by looking at two stellar precious metal investments for any portfolio.

Start with this traditional miner

Irrespective of whether it’s too late to buy gold stocks, Barrick Gold (TSX: ABX) is one gold miner that should be on the radar of investors everywhere. Barrick is one of the largest gold producers on the planet.

There are a few reasons why investors may want to consider Barrick for their portfolio.

First, Barrick is diversified. The company is best-known for its massive size and impressive gold production, but Barrick also has a growing copper mining operation. Copper is a key metal used in energy projects, and as a result, demand for the metal is surging. Prospective investors can expect that growth to continue.

Next, we have the sheer size of Barrick. Barrick has operations in 18 different countries on four continents. This includes multiple top-tier assets that will provide the miner with production for at least a decade.

To put that into context, in 2024, Barrick’s gold production was a whopping 3.9 million ounces.

Finally, there’s the dividend. Barrick offers investors a quarterly dividend that consists of a base and performance payout. This means that the better the quarter, the higher the dividend.

As of the time of writing, the yield on that dividend works out to a tasty 2.26%, with the next ex-dividend date coming this week.

In short, it’s not too late to buy gold stocks like Barrick.

Not all gold stocks are gold miners

Investors looking to buy gold stocks should also consider this other option, which isn’t a gold miner at all. Specifically, I’m referring to Wheaton Precious Metals (TSX: WPM), which is a precious metals streamer.

Streamers differ from their traditional mining peers in that they don’t actually own or operate any mines. Instead, streamers provide upfront capital for the traditional miners to invest and begin operations.

In exchange for that upfront capital, streamers are allocated a certain amount of the metals produced by the mine that can be purchased at a hugely discounted rate. The streamer can then proceed to sell those precious metals at the market rate or decide to hold them.

That discounted rate can be as low as US$550 per ounce of gold and US$6 per ounce of silver. By way of comparison, the market spot price for an ounce of gold is near US$3,500. The market price for an ounce of silver hovers near US$40.

Another key advantage that streamers have over traditional miners is risk. Because the streamer doesn’t actually own or operate any of the mines, it is free to move on to seek out additional streaming agreements, leaving the traditional miner to operate the mine.

That’s part of the reason why Wheaton boasts a portfolio of over a dozen active streams on four continents.

But that’s not all.

Wheaton offers investors a quarterly dividend that is based on the performance of the prior four quarters. Given the rising prices of precious metals, the yield is rising each quarter. As of the time of writing, that dividend carries a yield of 1.6%.

Prospective investors still contemplating whether it’s still too late to buy gold stocks and streamers like Wheaton, the answer is a resounding no.

Wheaton offers investors an investment path with lower risk (compared to traditional miners), significant growth potential, and a growing yield.

Is it too late to buy gold stocks?

No stock is without risk, and that includes precious metal stocks like the two above. Fortunately, Barrick and Wheaton can provide defensive appeal, growth potential and a respectable dividend to offset some of those risks.

In my opinion, one or both of the above should be core holdings in any well-diversified portfolio.

Buy them, hold them, and watch your portfolio grow.