Dogecoin and other cryptocurrencies are volatile. They’ve been competing with gold and precious metals for capital that goes to safe-haven assets.
It appears it’ll be another down day for cryptocurrencies. If you like the space, buy some Dogecoin, Bitcoin, or other digital currency on the dip as a part of a diversified investment portfolio and forget about them.
Right now, gold and precious metal stocks are on the move. And investors should highly consider putting some capital in this sector to diversify their holdings.
Barrick Gold (TSX:ABX)(NYSE:GOLD) is one of the largest-cap gold producers available on the TSX and NYSE. Even Warren Buffett bought some shares for Berkshire Hathaway in the past as a hedge, which suggests that Barrick Gold’s fundamentals are solid.
Indeed, Barrick has an investment-grade balance sheet with an S&P credit rating of BBB. Right now, with all the macro uncertainties and money printing around the world, it’s a good time as any to buy some Barrick Gold stock.
In its first-quarter report, management noted that gold and copper production is progressing as planned and that Barrick Gold should meet its annual guidance of 4,400K-4,700K ounces of gold production with all-in sustaining costs of US$970-$1,020 per ounce. The gold price stands at the US$1,800 range per ounce.
As of writing, Barrick Gold stock climbed 3% on the day. The gold stock has appreciated about 25% since its low in February, but at about $30 per share, it’s still a long way off — another 33% upside to get back to its 2020 high.
The gold stock also yields north of 1.4% with an annualized payout of US$0.36 per share.
In the first quarter, the gold stock’s revenue jumped 39% year over year to US$934 million and reported net income of US$136 million versus a loss of more than US$21 million a year ago. This translated to earnings per share of US$0.56 for the quarter. Operating cash flow also more than doubled to US$356 million.
For 2021, the company expects gold production of 2,047K ounces and all-in sustaining costs of US$950-$1,000 per ounce.
With an annualized payout of US$1.40 per share, the gold stock yields approximately 1.9%.
Analysts estimate the gold stock has another 12% upside or so over the next 12 months.
Wheaton Precious Metals
WPM stock is lower risk than Barrick and Agnico-Eagle in that it is a precious metals streaming company that enjoys low-cost access to gold and silver, because it doesn’t explore, develop, or operate any mines. Instead, it partners with mining companies with streaming agreements.
Therefore, Wheaton Precious Metals has leverage to increases in precious metal prices and growth that can arise from new stream agreements.
The company enjoys a high net margin of about 49% and no long-term debt. Analysts forecast the company will appreciate another 27% or so over the next 12 months. The stock yields 1%.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Kay Ng owns shares of Wheaton Precious Metals. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short June 2021 $240 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares).