Gold stocks have been on quite a run up over the past several months, thanks in part to continued stock market uncertainty.
Since the end of April, the price of gold has been mostly above the $1,700 mark and it continues to rise.
When markets are down, one of the biggest things investors turn to are safe-haven assets. Gold is of course one of the most prominent of those assets, with bonds being another.
Money & Markets is so high on gold as a good investment in the current environment, Chief Investment Strategist Adam O’Dell believes it could top out at $10,000 an ounce in the coming years. Click here to see his presentation.
The gold market skyrocketed to new highs as equities retreated on fears of the coronavirus pandemic.
But that price hasn’t faltered much, even as the stock market rises. Investors still appear to be hedging their bets against a rapid rise of the U.S. economy after the pandemic subsides.
Back in March, we recommended three gold stocks as the market was starting to crater.
Now, we’ll update you on how those companies have performed and what you should do if you bought them when we made the recommendation.
Franco Nevada Climbs
Our first recommendation was a bit unique when it comes to gold stocks.
Franco Nevada Corp. (NYSE: FNV) focuses on gold royalty and streams. It doesn’t own mines or do any exploration. Instead, it owns royalties on gold, which limits exposure to capital, operating and other costs.
Based in Toronto, Ontario, Canada, Franco Nevada has been one of the best gold stocks for investors in terms of returns. In the past five years, the company has a return of 130.7%.
When we recommended Franco Nevada, the share price was around $107.
Now, the company is trading at around $135 per share — a total adjusted return of 26.3%, including dividends.
On top of that, the company pays a hefty $0.25-per-share dividend to investors, adding to the win.
Even with equities making a big comeback, Franco Nevada continues to trade above its 200-day moving average and has reached new 52-week highs.
Barrick Gold Doesn’t Disappoint
Another Canadian company, Barrick Gold Corp. (NYSE: GOLD), is one of the largest producers of international gold. It has mines in North and South America.
Of the top 10 top mines in the world, Barrick owns half of them.
Its all-in sustaining cost remains relatively low, meaning even if gold prices dip, Barrick shares won’t likely match that drop.
Barrick was priced at around $19 per share when we made the recommendation in March.
Shares are now trading at close to $24 per share. That gives investors a total adjusted return of almost 27%.
Barrick also pays out a $0.07-per-share dividend.
The company continues to perform well, even as gold prices have tapered off slightly.
Newmont Mining Continues to Shine
The biggest winner in our gold stocks recommendation is also the largest company on the list.
Newmont Mining Corp. (NYSE: NEM) had a market cap around $37 billion when we recommended it.
Based outside Denver, Colorado, Newmont is a gold company but also produces silver, copper, zinc and lead. It has operations in North and South America, Australia and Africa.
But the real story is the company’s earnings per share. In the last year, its annual earnings per share jumped 495.3%. For the last quarter of 2019, that growth was 10,200%. That means Newmont’s business is growing and that additional revenue can go back to shareholders via dividends, or be reinvested.
When we recommended Newmont, its share price was around $44 per share. That has skyrocketed to more than $58 per share, giving investors a 32.3% total adjusted return.
Its dividend is around $0.14 per share, which isn’t bad.
What to Do With Your Gold Stocks
While this isn’t a managed portfolio of gold stocks, the best thing to do now would be to sit on your investments and continue to hold out for more profit.
Gold prices are going to continue to climb. That means these companies are going to benefit from those increases. As an investor, so will you.
The average total adjusted return for these three gold stocks is 28.49% and they all still pay a dividend. So keeping your position would ensure income from the dividend and gains from additional jumps in the share prices.
It’s Still a Good Time to Invest in Gold Stocks
I recently sat down with Banyan Hill Publishing’s Matt Badiali.
You can check out that conversation here:
Badiali, the Editor of Real Wealth Strategist, Apex Profit Alert and Front Line Profits, was a geologist before he got into investing. Since then, he has provided outstanding investment information, especially when it comes to precious metals, oil and other natural resources.
While gold is on a high, it is presenting investors with a unique opportunity for big profits.
We tell you just what that opportunity is, why it has presented itself and what you should do to capitalize on it.
As a bonus, Badiali even talks about how high gold can reach and how long he thinks it will take to get there.