Gold prices have rallied by as much as 35% this year, and they’re on track to go much higher.
You see, economists watching the markets predict another large stimulus package on the way here in the U.S. that could be worth up to $2.2 trillion.
And as volatility continues and money floods into the markets, it’ll put downward pressure on the dollar.
In turn, market uncertainty – combined with a devalued dollar – could further boost gold prices, as gold and the dollar have an inverse relationship. The lower the dollar moves, the higher gold rises.
And many economists see the price of gold rising above $2,500, if not higher over the next several months.
Gold stocks are poised to benefit as a result.
So today, I have three precious metal companies below that could help you capitalize on gold’s impending price surge in 2021…
Best Gold Stocks for 2021 No. 3: Alamos Gold
Toronto-based Alamos Gold Inc. (NYSE: AGI) is an intermediate gold producer. The company has three operating mines in North America – Young Davidson, Island Gold, and Mulatos. Alamos also has several major portfolio projects across the U.S., Canada, Mexico, and Turkey.
The gold producer has a strong financial track record through low-cost production. Last year alone, the company mined over 500,000 ounces of gold. Alamos generated more than $683 million in revenue as well.
In the company’s most recent earnings report, it noted earnings per share of $0.15, beating the estimate of $0.12. Alamos’ revenue grew by 26.3% year-over-year to $218.4 million.
The company also increased its gold production by 49% to 117,100 ounces. The gold producer’s free cash flow surged to $76 million, pushing the company to raise its dividend by 33% to $0.08 per share.
And the company continues to bolster its gold production…
Alamos says it’s on track to match its projected gold production of 405,000 to 435,000 ounces for the year.
The gold company noted it’s “Phase-3” expansion at its Island Gold mine could drive its annual production up by 72% to 236,000 ounces by 2025.
Between 2018 and 2019, the same mine surged by 50% to produce 150,000 ounces of gold.
With the company having access to metal-rich gold deposits all over the world, it makes Alamos one of the best gold producers to invest in for 2021.
Best Gold Stocks for 2021 No. 2: Franco Nevada
Founded in 1982, Franco-Nevada Corp. (NYSE: FNV) was the first royalty-based gold company on the market.
This means Franco-Nevada isn’t directly mining gold. Rather, it provides the funding needed for exploration projects. In return, any company Franco-Nevada helps has to pay the company royalties based on an agreed-upon amount of gold.
So, Franco-Nevada enjoys exposure to the gold market without having to get its hands dirty in the actual mining business.
The company’s revenue relies entirely on gold production and not on the overall profitability of a mine. As long as gold is being produced, Franco-Nevada generates revenue. This remains true no matter what direction gold prices move.
This has worked out well for the company, as it has more than 400 portfolio assets…
Even when the price of gold declined in the years following 2011, the company’s share value has grown by roughly 98%. More recently, Franco-Nevada dealt with pandemic-related disruptions and still managed to produce strong results.
During the second quarter, Franco-Nevada reported earnings per share of $0.48. The company also said revenue was $195.4 million, having sold 104,330 gold equivalent ounces in the period.
With a large sum of development royalties available to Franco-Nevada, the company anticipates revenue between $60 million and $75 million for the year. For full-year 2020, Franco-Nevada says it will produce between 457,000 to 505,000 gold equivalent ounces.
Given the fact that the company is also debt-free and growing its cash balance, it should see strong growth over the next few years.
Best Gold Stocks for 2021 No. 1: Barrick Gold
With a $46 billion market cap, Canada-based Barrick Gold Corp. (NYSE: GOLD) is the largest gold miner in the world.
The company has 16 operating sites in 13 countries including the U.S., Canada, and South America. Many of these sites are considered to be “tier-one” mining assets.
In the gold mining world, tier-one assets produce more than 500,000 ounces of gold per year, have a 10-year-long lifespan, and have a low cash-cost to operate.
Last year alone, Barrick produced over 2.2 million ounces of gold between its two Nevada-based properties, Goldstrike and Cortez. Both of these mining sites are considered to be tier-one operations and have between 6 million and 8 million ounces of available gold.
And that’s just two of the company’s 16 mining sites…
In Barrick’s third-quarter, the gold miner generated $173.7 million in revenue. In the same period, the company produced 1.16 million ounces of gold. And Barrick noted that its average realized gold price surged 30%.
Plus, the company said it lowered its cost per ounce of gold from $984 to $966 between July and September, enabling Barrick to hike its dividend payout by 12.5%.
With a rock-solid balance sheet and high-quality mining sites, the company will remain a strong gold producer for years to come.
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