Harness Growth Potential With These 3 Gold Stocks

After hitting an all-time high in December last year, gold prices will continue to rise in 2024 due to surging geopolitical risks and the possibility of the Federal Reserve policy rate cuts. Hence, it could be ideal to buy robust gold stocks Barrick Gold (GOLD), Centamin (CELTF), and Centerra Gold (CGAU), which have huge growth potential. Continue reading…

Gold is widely considered a hedge against geopolitical and economic uncertainty, making it an attractive asset for investors seeking stability and protection. So, it could be wise to buy fundamentally sound gold stocks Barrick Gold Corporation (GOLD), Centamin plc (CELTF), and Centerra Gold Inc. (CGAU) with massive growth potential.

Gold is widely perceived as a beautiful piece of ornament and is known for its stable and profitable investment prospects. Gold has primarily benefited investors with its constant price increments over the decades.

In December 2023, gold prices touched an all-time high of $2,135.39/oz, propelled primarily by a weak U.S. dollar and expectations the Fed will begin lowering rates. Gold prices surged during the last few months of 2023 after a powerful rally was sparked by central bank purchasing and mounting investor concern over the Israel–Hamas and Russia–Ukraine conflicts.

UBS forecasts gold prices to surge further in 2024 on expectations that the Fed will start cutting interest rates. “We are expecting gold to be pushed higher by a Fed easing. Also this comes with a weaker dollar” said the investment bank’s precious metals strategist Joni Teves, who anticipates the yellow metal to hit $2,200 per ounce by the year-end.

Meanwhile, YLG Corp expects global gold prices to continue to rise, hitting a new record high of $2,300 per ounce this year.

As per the Mordor Intelligence report, the gold market size is expected to be valued at 4.42 kilotons in 2024 and is further estimated to reach 6.32 kilotons by 2029, expanding at a CAGR of 7.4% during the forecast period (2024-2029).

Factors like demand for gold in the form of jewelry, technology, and long-term savings will drive market growth, especially in developing nations, where gold is frequently seen as a luxury item and a way of preserving wealth.

Moreover, investors’ interest in gold stocks is evident from the iShares Gold Trust Micro ETF (IAUM) 13.3% gains over the past year.

In light of these encouraging trends, let’s look at the fundamentals of the three best Miners - Gold stocks, beginning with number 3.

Stock #3: Barrick Gold Corporation (GOLD)

Based in Toronto, Canada, GOLD engages in the exploration, mine development, production, and sale of gold and copper properties internationally. It has ownership interests in producing gold mines located in Argentina, Canada, Côte d'Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the United States.

On March 1, 2024, GOLD’s Africa-based largest gold mine, Kibali, and the Autorite de Regulation de la Sous-Traitance dans le Secteur Prive, the body that oversees the DRC’s sub-contracting sector, agreed to collaborate on a range of local content initiatives.

This strategic partnership has been designed to enhance the mine’s already extensive use of Congolese contractors and suppliers in line with parent company Barrick’s global policy of supporting local businesses and employing host country nationals.

On February 14, GOLD’s Board of Directors announced the declaration of a dividend of $0.10 per share for the fourth quarter of 2023. The quarterly dividend dividend will be paid on March 15, 2024,, to shareholders of record at the close of business on February 29, 2024.

GOLD pays an annual dividend of $0.40, which translates to a yield of 2.68% at the current share price. Its four-year average dividend yield is 2.77%. Moreover, the company’s dividend payouts have increased at a CAGR of 16.1% over the past five years.

GOLD’s revenue and EBITDA have grown at respective CAGRs of 9.5% and 9.9% over the past five years. The company’s EBIT has increased 15.5% over the same timeframe, while its tangible book value and total assets have improved at CAGRs of 25.9% and 15.1%, respectively.

For the fourth quarter that ended December 31, 2023, GOLD’s revenue increased 6.9% from the prior quarter to $3.06 billion. The company's adjusted net earnings grew 11.5% and 12.5% from the quarter-ago value to $466 million and $0.27 per share, respectively. Its attributable EBITDA and free cash flow came in at $1.07 billion and $136 million, respectively.

Analysts expect GOLD’s revenue and EPS for the first quarter (ending March 2024) to increase 7.1% and 40.3% year-over-year to $2.83 billion and $0.20, respectively. Further, the company has topped consensus EPS estimates in all four trailing quarters, which is impressive.

Shares of GOLD have declined 5.6% over the past month to close the last trading session at $15.53.

GOLD’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

GOLD has a B grade for Growth and Quality. It is ranked #8 out of 40 stocks in the Miners - Gold industry.

To check other POWR Ratings of GOLD for Value, Momentum, Stability, and Sentiment, click here.

Stock #2: Centamin plc (CELTF)

Headquartered in Saint Helier, Jersey, CELTF is engaged in the exploration, mining, and development of precious metals in Egypt, Burkina Faso, Côte d’Ivoire, Jersey, the United Kingdom, and Australia. Its flagship asset is the Sukari Gold Mine project, which covers an area of nearly 160 square kilometers located in the Eastern Desert of Egypt.

On January 9, 2024, CELTF announced encouraging results of its maiden drill programme on the company’s Eastern Desert Exploration (EDX) landholding in Egypt and also furnished an update on the anticipated exploration programme for 2024.

CELTF’s EDX blocks consist of 3,000 km of greenfield exploration tenements within Egypt's Nubian Shield - a highly prospective geological belt that has not been explored using modern exploration methods. Further, its 2024 work programme includes delineating potential resources and further drill targets in Egypt as part of the growth strategy.

On October 12, 2023, CELTF announced Sukari’s new life of mine plan, which reestablished it as a world tier-one gold asset. The plan forecasts long-term production above 500,000 ounces per year at all-in sustaining costs below $1,000 per ounce, underscoring the company’s commitment to maximizing free cash flow generation.

During the fiscal year 2023, CELTF delivered a solid performance and achieved 9.5 million hours worked at the Sukari Gold Mine with zero lost time injuries (LTI). Further, during the fourth quarter, its gold production was 128,127 ounces, taking the total to 450,058 oz produced for 2023.

CELTF’s revenue increased 40.7% year-over-year to $265.25 million for the fourth quarter that ended December 31, 2023, and for the fiscal year 2023, its revenue was $891.26 million. As of December 31, 2023, the company’s cash on hand, and total cash and liquid assets were $93 million and $153 million, respectively.

As per business guidance for fiscal 2024, CELTF’s gold production is expected to range between 470,000 and 500,000 oz per annum, weighted evenly between H1:H2 (50:50).

Street expects CELTF’s revenue for the fiscal year 2024 to increase 7.1% year-over-year to $947.65 million. CELTF’s stock has gained 4.2% over the past six months to close the last trading session at $1.17.

CELTF’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

The stock has a B grade for Growth, Value, Quality, and Stability. Within the Miners - Gold industry, CELTF is ranked #3 of 41 stocks.

Click here to access additional ratings of CELTF for Momentum and Sentiment.

Stock #1: Centerra Gold Inc. (CGAU)

Based in Toronto, Canada, CGAU is a gold mining company that acquires, explores, develops, and operates gold and copper properties internationally. It explores gold, copper, and molybdenum deposits. Its flagship projects include the 100% owned Mount Milligan gold-copper mine in British Columbia, Canada, and the Öksüt Gold Mine located in Turkey.

On February 22, 2024, CGAU announced a quarterly dividend payment of C$0.07 ($0.05) per common share – about $11.20 million. The quarterly dividend is payable on March 27, 2024, to shareholders of record as of the close of business on March 13, 2024.

CGAU’s annual dividend translates to a yield of 4% at the current share price. Its four-year average dividend yield is 3.18%. Moreover, the company’s dividend payouts have increased at a CAGR of 15.5% over the past three years.

On February 14, CGAU and its subsidiary, Thompson Creek Metals Company Inc., entered an additional agreement with RGLD Gold AG, a subsidiary of Royal Gold, Inc. (RGLD), relating to the Mount Milligan Mine, resulting in a life of mine extension to 2035 and also establishes favorable parameters for potential future mine life extensions.

The additional agreement will potentially unlock incremental mineral reserves and resources at Mount Milligan for mutual benefit.

CGAU’s revenue and EBITDA have grown at respective CAGRs of 14.9% and 9.4% over the past three years. The company’s levered free cash flow has increased 25.3% over the same timeframe.

During the fourth quarter that ended December 31, 2023, CGAU’s revenue increased 63.2% year-over-year to $340 million. It reported earnings from mine operations of $138.10 million, up 318.5% from the prior year’s quarter. Its free cash flow was $111 million for the quarter.

In addition, the company’s adjusted net earnings came in at $61.20 million, or $0.28 per share, compared to an adjusted net loss of $13.70 million or $0.06 per share, respectively.

According to the 2024  guidance, CGAU’s full-year consolidated gold production guidance is between 370,000 and 410,000 ounces, reflecting an 11% increase from the midpoint of guidance over last year’s production, and copper production guidance is between 55 and 65 million pounds of copper.

For the fiscal year 2024, analysts expect CGAU’s revenue and EPS to grow 4% and 682.5% year-over-year to $1.14 billion and $0.39, respectively. The company surpassed the consensus revenue estimates in three of the four trailing quarters.

Over the past month, the stock has plunged 4.2% to close the last trading session at $5.19.

CGAU’s POWR Ratings reflect its robust outlook. The stock has an overall B rating, translating to a Buy in our proprietary rating system.

CGAU has an A grade for Growth and a B for Value and Quality. It is ranked #2 among 40 stocks within the Miners - Gold industry.

To see the other ratings of CGAU for Sentiment, Momentum, and Stability, click here.

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GOLD shares rose $0.06 (+0.40%) in premarket trading Monday. Year-to-date, GOLD has declined -16.84%, versus a 7.90% rise in the benchmark S&P 500 index during the same period.

About the Author: Mangeet Kaur Bouns

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.


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