In this article, we will discuss the 12 Most Profitable Gold Stocks Now. You can skip our industry overview and go directly to the5 Most Profitable Gold Stocks Now.
Gold is a highly liquid asset, mostly used as a form of investment by households and institutional investors. The precious metal has been used as a store of value for several centuries. Gold tends to hold value and even rises in value over time. On the contrary, the value of money deteriorates over time. Thus, it makes sense for people to keep their savings in gold instead of paper money.
Although gold has shown to be a reliable way to protect against inflation over a long period of time, its performance as an inflation hedge in the short term is not as strong. A report by Reuters states that only 16% of the variation in the gold price since 1971 can be linked to changes in CPI inflation. Moreover, there have been periods where gold prices and inflation have shown an inverse relation. For example, gold prices went down by 10% on average each year, whereas inflation remained high and averaged 6.5%, from 1980 to 1984.
Although the gold price has been in a correction over the past month, losing around $100 in February. The price of the precious metal has rallied quite a bit from $1600 in November 2022 to $1836 currently. According to Daniel Ghali, a commodity strategist at TD Securities, the market has adjusted its expectations for Federal Reserve cuts this year due to strong growth and inflation data, which aligns with the view that interest rates will remain high for an extended period of time. As a result, this has had a negative impact on precious metals.
A recent study by the World Gold Council found that central banks around the world continued to increase their gold reserves in the first half of 2022, with central bank demand reaching its highest level since the end of the gold standard in the 1970s. The study also found that consumer demand for gold jewelry, coins, and bars was strong, particularly in Asia, where cultural and economic factors continue to drive demand for the precious metal.
An investor seeking to safeguard savings should consider investing in gold. Although there are doubts on gold’s value as an inflation-hedge in the short-term, there is consensus on the metal’s property of being a store of value in the long-term. The downturn in the equity market has meant that mining stocks remain undervalued when compared to U.S. stocks. The hard landing scenario, which now seems likely, is also not bad news for gold and gold stocks.
As noted by the German firmHeraeus:
A recession is not necessarily bad news for gold. Typically, precious metal prices decline during recessions, including gold. In the 1980 recession, the gold price did decline (by 6%) but that was partly because it had just reached a record price at the start of 1980 and the Fed had finally pushed interest rates above inflation. However, in subsequent recessions the gold price has fallen less and recovered more quickly than the other metals. The gold price tends to be slightly higher at the end of a recession than at the start.
For more information on the biggest gold mines in the world, you can head on to 13 Biggest Gold Mines in the World.
Our Methodology
To come up with the 12 most profitable gold stocks now, we first used stock screeners to identify the biggest gold companies. We then proceeded to short-list the stocks based on their net profit in the last twelve months. Finally, we ranked the companies in our list in ascending order of their Net Profit (TTM).
12. B2Gold Corp. (NYSE:BTG)
Net Profit (TTM): $252.80 million Founded in 2007, B2Gold Corp. (NYSE:BTG) is a gold producer based in Canada that operates three gold mines located in Mali, the Philippines, and Namibia. The company primarily produces gold, but it also produces silver and copper. On February 22nd, 2023, B2Gold Corp. (BTG) announced its financial results for the fourth quarter of 2022, reporting a revenue of $592.47 million, which missed market expectations by $0.782 million. The company reported a normalized EPS of $0.11, which missed estimates by $0.02. In addition to B2Gold Corp. (NYSE:BTG), Public Joint Stock Company Polyus (PLZL.ME), Franco-Nevada Corporation (NYSE:FNV), and Zijin Mining Group Company Limited (2899.HK) are included in our list of 12 Most Profitable Gold Stocks Now.
11. AngloGold Ashanti Limited (NYSE:AU)
Net Profit (TTM): $316.00 million
AngloGold Ashanti Limited (NYSE:AU) is a mining company headquartered in Johannesburg, South Africa, with operations spanning across Africa, Australia, and the Americas. Apart from gold mining, the company also produces silver and sulphuric acid as by-products. The Gieta project, located in the Mwanza region of Tanzania, is AngloGold Ashanti Limited (NYSE:AU)'s flagship project. With a production of 486 Koz of gold, it is the company's most significant project in terms of gold production value, highlighting the company's commitment to delivering high-quality projects.
On January 10, 2023, Abhi Agarwal, an analyst at Deutsche Bank, increased his price target on AngloGold Ashanti Limited (NYSE:AU) to $27 from $20 while keeping a Buy rating on the company’s stock.
As per Insider Monkey’s database, 16 hedge funds held stakes worth $287 million in AngloGold Ashanti Limited (NYSE:AU) in Q4 2022, compared to 13 funds in the prior quarter with stake worth $206 million.
10. Barrick Gold Corporation (NYSE:GOLD)
Net Profit (TTM): $432.0 million
Barrick Gold Corporation (NYSE:GOLD) is a mining company that mainly produces gold and copper. The company operates 10 gold mining operations, including the Nevada Gold Mines in the US, Bulyanhulu and North Mara in Tanzania, Hemlo in Canada, and Pueblo Viejo in the Dominican Republic. Barrick Gold Corporation (NYSE:GOLD) also runs copper mining operations in Saudi Arabia, Zambia, and Chile. According to the company’s fourth-quarter report, Barrick Gold Corporation (NYSE:GOLD) is anticipating a production value of 4.2 to 4.6 million ounces of gold this year as compared to last year’s output of 4.14 million ounces. This increase in production would reverse a three-year downturn that witnessed last year's yearly output fall to its lowest level since the year 2000.
On January 30, 2023, Matthew Murphy, an analyst at Barclays, increased his price target on Barrick Gold Corporation (NYSE:GOLD) to $26 from $23 while keeping an Overweight rating on the company’s stock.
As per Insider Monkey’s database, 40 hedge funds held stakes worth $721 million in Barrick Gold Corporation (NYSE:GOLD) in Q4 2022, compared to 35 funds in the prior quarter with stake worth $777 million.
Old West Management made the following comment about Barrick Gold Corporation (NYSE:GOLD) in its Q4 2022 investor letter:
“Barrick Gold Corporation(NYSE:GOLD) is the second largest gold miner in the world, with operations in the U.S., Canada, Africa, South America and more. Barrick is also a major copper producer. Former Goldman Sachs executive John Thornton took control of the company in 2012 and quickly realized he wanted someone with a mining background to run the company. Mark Bristow, at that time CEO of Randgold, was considered one of the best gold mining executives in the world. Thornton wanted Bristow so badly Barrick bought Randgold in 2018. Bristow who is South African, had extensive experience operating mines throughout Africa, and in fact would fly his own single engine plane to visit mines. He has his PhD in Geology, and he has flourished running Barrick the past five years.
Barrick is estimated to have $1.6 billion of net income this year on $11.5 billion of revenue. Net Income has been growing 15% per year. The stock trades at $19.00 per share which is 16 times forward earnings, and the stock has a 3.15% dividend yield. Barrick has a fortress balance sheet with $5.7 billion in cash and $5 billion of long term debt, which is only one time EBITDA”
9. Compañía de Minas Buenaventura S.A.A. (NYSE:BVN)
Net Profit (TTM): $602.55 million Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) is a Peruvian mining company that specializes in producing precious metals, including gold, silver, copper, iron, and zinc. With more than 68 years of experience in the industry, Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) operates a total of eight active-producing mines. Among these mines, four are dedicated to gold production, two to silver, one to copper, and one to iron and zinc. On 1st March 2023, Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) announced its financial results for the fourth quarter of 2022, reporting a revenue of $246.4 million, beating market estimates by $36.4 million. The company reported a normalized EPS of $0.21, which beat the market expectation by $0.02.
8. Wheaton Precious Metals Corp. (NYSE:WPM)
Net Profit (TTM): $669.12 million
Wheaton Precious Metals Corp. (NYSE:WPM) is a Canadian multinational company that specializes in the purchase and sale of gold, palladium, silver, and cobalt deposits. Unlike traditional mining companies, Wheaton Precious Metals Corp. (NYSE:WPM) does not operate any mines. Instead, the company acquires all or a portion of the cobalt and precious metals output from several high-quality mines. Currently, Wheaton Precious Metals Corp. (NYSE:WPM) has streaming agreements for 21 operating mines and 13 development projects, highlighting the company's diversified portfolio of precious metal assets.
On January 30, 2023, Matthew Murphy, an analyst at Barclays, increased his price target on Wheaton Precious Metals Corp. (NYSE:WPM) to $42 from $40 while keeping an Equal Weight rating on the company’s stock. According to the analyst, economic growth has been stronger than anticipated. The analyst suggests that investing in gold is a wise choice to protect against a potential worsening of the economic situation, and the analyst still favors gold over copper equities.
As per Insider Monkey’s database, 28 hedge funds held stakes worth $672 million in Wheaton Precious Metals Corp. (NYSE:WPM) in Q4 2022, compared to 25 funds in the prior quarter with stake worth $564 million.
7. Agnico Eagle Mines Limited (NYSE:AEM)
Net Profit (TTM): $670.24 million
Agnico Eagle Mines Limited (NYSE:AEM) is a Canadian mining company. The company specializes in the exploration, development, and production of minerals and does so through the operation of both underground and open pit mines located in Canada, Mexico, Finland, and Australia. Agnico Eagle Mines Limited (NYSE:AEM) extensive project portfolio comprises five underground mines, three open pit mines, and three mines with both underground and open pit mining operations, illustrating the company's diversified operations and technical capabilities.
On January 30, 2023, Matthew Murphy, an analyst at Barclays, increased his price target on Agnico Eagle Mines Limited (NYSE:AEM) to $65 while keeping an Overweight rating on the company’s stock. The analyst maintains a preference for gold over copper equities.
According to Insider Monkey’s database, 41 hedge funds held stakes worth $613 million in Agnico Eagle Mines Limited (NYSE:AEM) in Q4 2022, compared to 39 funds in the prior quarter with stakes worth $598 million.
Old West Management made the following comment about Agnico Eagle Mines Limited (NYSE:AEM) in its Q4 2022 investor letter:
“Agnico Eagle Mines Limited (NYSE:AEM) is the third largest gold miner in the world with mines in Canada, Australia, Finland, and Mexico. Although we have long respected the company, we became shareholders when they acquired our portfolio holding, Kirkland Lake Gold. Agnico chairman Sean Boyd is one of the most respected executives in the mining industry. He was appointed CEO in 1998 and was recently appointed Executive Chairman. Boyd is a large shareholder and perfectly fits our owner/manager role. This year the company is projected to make nearly $1 billion in net income on $5.8 billion in revenue with $758 million of free cash flow. Net income has been growing 15% per year for several years. Agnico has a fortress balance sheet with $1.3 billion of long term debt, which is only 2 times EBITDA, and $820 million cash in the bank. The stock trades at $55 per share, which is 26 times earnings with a 2.9% dividend yield.”
6. Gold Fields Limited (NYSE:GFI)
Net Profit (TTM): $701.30 million
Headquartered in Johannesburg, South Africa, Gold Fields Limited (NYSE:GFI) is a gold mining company that explores, develops, and produces copper and gold. Several open pit and underground mines are run by the company in the Americas, Australia, South Africa, and West Africa. The open pit mines comprise Cerro Corona, Salares Norte, Gruyere, Damang, Tarkwa, and Asanko, and the underground mines include the South Deep mine in the South African region. Moreover, Gold Fields Limited (NYSE:GFI) also holds 100% interest in Agnew, St Ives, and Granny Smith mines in Australia.
As per Insider Monkey’s database, 17 hedge funds held stakes worth $385 million in Gold Fields Limited (NYSE:GFI) in Q4 2022, compared to 24 funds in the prior quarter with stake worth $362 million.
Here is what Baron Funds specifically said about Gold Fields Limited (NYSE:GFI) in its Q2 2022 investor letter:
“Gold Fields Limited(NYSE:GFI) is an established gold producer based in South Africa with a diversified global portfolio of precious metals assets. Shares fell due to the pullback in gold prices and the company’s announced acquisition of gold producer Yamana Gold at a large premium. We are positive on gold prices and expect continuous improvements in Gold Fields’ cash costs. We expect at least 50% production growth over the next decade as the company ramps up volumes, including Yamana’s high quality development projects in Chile, Canada, and Brazil.”
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Disclosure: None.12 Most Profitable Gold Stocks Now is originally published on Insider Monkey.
