3 High-Potential Gold Mining Stocks to Hedge Against Inflation

Gold prices largely remained on the upper side through 2024, reaching multiple all-time highs this year. This price rally is expected to continue in 2025, predicted to rise to $3,000 per troy ounce by end-2025. Amid this, investing in companies engaged in gold mining and selling could result in prosperity for investors.

Therefore, investors could consider fundamentally solid mining stocks Agnico Eagle Mines Limited (AEM), Barrick Gold Corporation (GOLD), and Kinross Gold Corporation (KGC) for investment to hedge against inflation.

Considering the current year’s market volatility and economic uncertainty, many investors are seeking ways to protect their investment portfolios; amidst this, one traditional hedge against inflation is gold. This is because during inflation, when consumer spending power tends to go down, gold emerges as a safe-haven asset, preserving investors' wealth.

The World Gold Council’s latest report for the third quarter of 2024 further favors this and paints an optimistic picture embedding the high potential of gold. Total gold demand increased 5% year-over-year to 1,313 tons, reaching a record for the third quarter. This surged the gold prices as well, resulting in a series of new record highs during the quarter.

Also, demand for gold in technology is continuously growing, as reflected by 7% year-on-year growth, fueled by growth in the electronics sector stemming from the AI boom.

Therefore, investors could scoop up some of the high-potential gold stocks, which will act as a hedge against inflation and offer long-term growth opportunities.

Considering the industry’s conducive trends, let’s delve into the fundamentals of the top three Miners - Gold stocks, starting with the third choice.

Stock #3: Agnico Eagle Mines Limited (AEM)

Headquartered in Toronto, Canada, AEM is a gold mining company engaged in the exploration, development, and production of precious metals. Its mines are located in Canada, Australia, Finland, and Mexico.

On October 25, AEM acquired 33,869,939 ATEX Resources Inc. (ATX) units at a price of C$1.63 per Unit for a total consideration of $40,000,000. Each unit comprises one common share of ATEX and one-half of one common share of the purchase warrant for ATEX.

The investment reflected AEM’s strategic equity investments in projects bearing high geological potential, and it offered exposure to an early-stage copper-gold exploration project.

During the third quarter, which ended September 30, 2024, AEM’s revenues from mining operations increased 31.2% year-over-year to $2.16 billion. The company’s adjusted net income totaled $572.58 million or $1.14 per share, reflecting growth of 167.3% and 159.1% from the prior year’s quarter, respectively. Its adjusted EBITDA came in at $1.26 billion, up 32.9% year-over-year.

Furthermore, the company’s free cash flow rose 654.3% from the year-ago value to $620.43 million.

For the fourth quarter (ending December 2024), analysts expect AEM’s revenue and EPS to grow 21.8% and 110.1% year-over-year to $2.14 billion and $1.20, respectively. Also, the company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.

AEM’s stock has gained 13% over the past six months and 64.6% over the past year to close the last trading session at $79.99.

AEM’s robust outlook is 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.

AEM has a B grade for Sentiment, Quality, and Growth. It is ranked #13 out of 42 stocks in the B-rated Miners - Gold industry.

To check additional AEM POWR Ratings for Value, Stability, and Momentum, click here.

Stock #2: Barrick Gold Corporation (GOLD)

Based in Toronto, Canada, GOLD internationally engages in the exploration, mine development, production, and sale of gold and copper properties. It also explores and sells silver and energy materials.

On November 7, GOLD declared a dividend of $0.10 per share for the third quarter of 2024. The dividend is payable on December 16, 2024, to shareholders of record at the close of business on November 29, 2024.

GOLD pays an annual dividend of $0.40, which translates to a yield of 2.33% at the current share price. Its four-year average dividend yield is 2.99%. Moreover, the company’s dividend payouts have increased at a CAGR of 17.3% over the past five years.

On October 2, GOLD officially launched the Super Pit project at its Lumwana copper mine, inaugurated by Zambian President Hakainde Hichilema. The $2 billion Super Pit Expansion project is expected to begin construction in 2025. After completion, the project will explore the potential to transform Lumwana into a long-life, high-yielding, top-25 copper producer and a Tier 1 copper mine.

GOLD’s revenues for the third quarter, which ended September 30, 2024, increased 17.7% year-over-year to $3.37 billion. Its attributable EBITDA rose 20.6% from the year-ago value to $1.29 billion. The company’s adjusted net earnings amounted to $529 million and $0.30 per share, up 26.5% and 25% from the prior year’s period, respectively.

Street expects GOLD's revenue for the fourth quarter (ending December 2024) to increase 41.7% year-over-year to $4.34 billion, while its EPS for the same period is expected to improve 80.5% year-over-year to $0.49. Moreover, the company topped the consensus revenue and EPS estimates in three of the trailing four quarters.

Over the past year, the stock has soared 8.9% to close the last trading session at $17.20.

GOLD’s bright prospects are reflected in its POWR Ratings. The stock has an overall grade of B, translating to a Buy in our proprietary rating system.

The stock has a B grade for Growth and Quality. GOLD is ranked #10 in the list of 42 stocks within the same industry.

Click here to check other GOLD ratings for Sentiment, Value, Stability, and Momentum.

Stock #1: Kinross Gold Corporation (KGC)

Headquartered in Toronto, Canada, KGC acquires, explores, and develops gold properties. The company operates several mines, including the Fort Knox mine and the Manh Choh project in Alaska, the Round Mountain and the Bald Mountain mines in Nevada, the U.S., the Paracatu mine in Brazil, and the La Coipa and the Lobo-Marte project in Chile.

On November 5, KGC’s Board of Directors declared a dividend of $0.03 per common share for the third quarter of 2024. The dividend is to be paid on December 12, 2024, to shareholders of record as of the close of business on November 28, 2024. KGC’s annual dividend of $0.12 translates to a yield of 1.23% at the current share price. Its four-year average dividend yield is 2.14%.

On September 10, KGC completed a Preliminary Economic Assessment (PEA) for the Great Bear project, which supports its strategy to acquire a top-tier, high-margin operation in a stable jurisdiction with robust infrastructure. The project expects an annual production of over 500,000 ounces per year in the initial 8 years, achieving an all-in-sustaining cost (AISC) of approximately $800 per ounce.

For the third quarter that ended September 30, 2024, KGC reported metal sales of $1.43 billion, up 29.9% year-over-year. Its operating earnings increased 142.1% from the year-ago value to $547.70 million. Adjusted net earnings attributable to common shareholders were $298.70 million and $0.24 per share, up 106.6% and 100% year-over-year, respectively.

Also, the company’s attributable free cash flow grew 201.1% from the year-ago value to $414.60 million.

Analysts expect KGC’s EPS for the fourth quarter (ending December 2024) to increase 105.5% year-over-year to $0.23. The company’s revenue is expected to grow 36.1% year-over-year to $1.52 billion. Furthermore, KGC has topped the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.

Shares of KGC have increased 19.5% over the past six months and 83.3% over the past year to close the last trading session at $9.75.

KGC’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

KGC has an A grade for Quality. The stock also has a B grade for Growth, Value, and Sentiment. It is ranked #3 out of 42 stocks in the B-rated Miners - Gold industry.

To check other POWR Ratings of KGC for Momentum and Stability, click here.

What To Do Next?

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AEM shares were trading at $82.33 per share on Tuesday afternoon, up $2.34 (+2.93%). Year-to-date, AEM has gained 52.99%, versus a 25.25% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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