Gold stocks rarely move quietly, and Agnico Eagle Mines (TSX:AEM) just proved that point. Shares of the Toronto-based gold miner have tumbled from their March 2026 peak of roughly $349 to around $220 at the time of writing.
Down almost 40% from all-time highs, the Canadian mining stock is valued at a market cap of $77 billion. The ongoing pullback tied to falling gold prices has raised the forward yield to 1%. For a company that produced record profit just a quarter ago, the stock price weakness offers you an opportunity to buy the dip.
Let me explain why I think this pullback is worth a closer look, and why I believe Agnico Eagle remains one of the better dividend stocks for Canadians to hold for the long haul.
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Why Agnico Eagle stock is down in 2026
Earlier this month, Agnico Eagle reported a mass rock movement along the north wall of the Barnat open pit at its Canadian Malartic complex in Quebec. The mining at the pit was paused, forcing Agnico to trim its production guidance through 2028.
The mining pause coincided with a wider gold market sell-off. Gold prices are down over 30% from all-time highs as investors are concerned that interest rates might rise in response to higher inflation data in recent months. Historically, gold prices and interest rates have had an inverse relationship.
The Canadian mining stock has returned 230% to shareholders after adjusting for dividends over the last three years. Based on consensus price targets, it still trades at a 52% discount as of July 2026.
The bull case for the Canadian dividend stock
Agnico Eagle is the second-largest gold producer by market value, targeting about 3.4 million ounces of gold this year. Roughly two-thirds of that production comes from five mines clustered in the Abitibi region of Quebec and Ontario, all within 300 kilometres of each other.
Chief Financial Officer Jamie Porter explained at a Bank of America mining conference in May that operating mines close together lets Agnico share equipment, technical staff, and suppliers across sites. He said this regional approach keeps the company’s costs US$300 to US$400 an ounce below the industry average.
In Q1 2026, the company produced about 830,000 ounces, ahead of its own budget, while realizing a record gold price of US$4,881 an ounce.
The Canadian dividend stock ended March with US$2.9 billion in net cash, following the repayment of US$1 billion of debt in 2025. Porter said he expects the cash position to approach US$5 billion by year-end, giving the gold miner ample room to fund growth and return cash to shareholders.
Agnico Eagle has paid a dividend every year since 1983, cutting it only once in that entire stretch. Management has been clear that the dividend is intended to hold up even in a much weaker gold price environment, while share buybacks serve as a flexible tool tied to profits and valuation.
Notably, Agnico has five internal growth projects, including expansions at Detour Lake and Canadian Malartic, plus new construction at Upper Beaver and Hope Bay, that together could add 1.5 million ounces of annual production over the next several years.
The Foolish takeaway
I think the market is punishing Agnico Eagle for a manageable operational hiccup and a broader gold sell-off.
A company generating record cash flow, sitting on a near-record balance sheet, and holding a more than 40-year dividend history does not usually trade 39% below its highs without the gap eventually closing.
Gold prices are expected to remain volatile in the near-term, especially if inflation moves higher. But for investors building a long-term, dividend-focused portfolio, I would treat this pullback as a chance to start or add to a position in Agnico Eagle stock.
