After trading above $2,000 an ounce for nearly three weeks straight, gold prices have pulled back a bit on profit-taking and firming up the U.S. dollar.
However, all the fundamentals that have taken gold prices from under $1,700 per ounce in November to $2,000 per ounce today are still in place, particularly in regard to the longer-term decline of the dollar. So I think this dip back below the $2,000 level is a great time to get into gold if you haven’t already.
Gold — One Month
With that in mind, I want to explore what I think are the top-five gold mining stocks for 2023 and discuss some of the key reasons why they may be attractive investment opportunities.
Newmont Corporation (NYSE: NEM) — One Year
Newmont Corp. is the largest gold mining company in the world. The company operates mines in various locations around the globe, including North and South America, Africa, and Australia. Newmont has a strong balance sheet, and its financial performance has been impressive in recent years.
Newmont produced 5.9 million ounces of gold in 2022. That was slightly lower than the previous year due to COVID-19's impact on operations. However, the company expects to produce 6.5 million ounces in 2023, which would represent a significant increase. In addition, Newmont has a strong pipeline of development projects that could further increase its production levels in the coming years.
In 2022, Newmont generated $12.8 billion in revenue, up from $10.5 billion the previous year. The company's net income was $2.1 billion, compared with $1.3 billion in the prior year. The increase in revenue and profit was mainly due to higher gold prices and a slight increase in production.
Newmont's EPS was $3.68 in 2022, compared with $2.34 in the prior year. The increase in EPS was mainly due to the higher net income and the company's share buyback program.
Newmont is a dividend-paying company and has consistently paid dividends to its shareholders over the years. In 2022, the company paid a dividend of $2.00 per share, which was an increase of 79% from the previous year. The company has stated that it intends to maintain its dividend policy going forward.
Newmont has a strong balance sheet, with a net debt of $853 million and a net debt-to-adjusted EBITDA ratio of 0.1x as of the end of 2022. The company has also been generating significant cash flows from its operations, which have allowed it to fund its growth initiatives and return value to shareholders through dividends and share buybacks.
Newmont is a well-established gold mining company with a strong balance sheet and a solid track record of financial performance. The company's production levels are expected to increase in the coming years, which could further boost its revenue and earnings. In addition, Newmont's dividend policy and share buyback program provide attractive options for investors looking for income and capital appreciation.
Barrick Gold Corporation (NYSE: GOLD) — One Year
Barrick is the second-largest gold mining company in the world with operations in several countries, including the United States, Canada, Australia, and throughout the African continent.
Last year, the company produced 4.4 million ounces of gold and is expected to produce between 4.4 million and 4.7 million ounces in 2023, with an all-in sustaining cost of $970–$1,020 per ounce.
Barrick Gold generated $9.6 billion in revenue in 2022, a significant increase from the previous year's $9.0 billion. The company's net income for the same period was $2.2 billion, a massive jump from the $2.0 billion it earned in 2021. The company's profitability was (and continues to be) driven by the price of gold, which has been on the rise since the onset of COVID-19.
Barrick's EPS has been steadily increasing over the past few years. In 2022, the company reported an EPS of $1.23, up from $0.92 in 2021. The company has also consistently paid dividends to its shareholders over the years, with a current dividend yield of around 1.4%.
Barrick Gold has a strong balance sheet, with a debt-to-equity ratio of 0.22, indicating that the company has relatively low debt compared with its equity. This means the company is in a good financial position to weather any economic downturns or market volatility.
Furthermore, the company has made significant progress in reducing its environmental footprint and improving its sustainability efforts. It has set a target to achieve net-zero greenhouse gas emissions by 2050 and implemented several initiatives to achieve this goal.
Barrick Gold is a well-established gold mining company with a strong track record of profitability and a commitment to sustainability. Its large-scale operations, steady production levels and forecasts, strong financial position, and commitment to sustainability make it a compelling investment opportunity for investors looking to add a gold mining stock to their portfolio.
AngloGold Ashanti Limited (NYSE: AU) — One Year
AngloGold Ashanti Limited is a leading gold mining company that operates in 10 countries across four continents.
The company’s gold production increased by 4% to 3.032 million ounces in 2022, compared with 2.918 million ounces in 2021. The production forecast for 2023 is between 2.9 million ounces and 3.2 million ounces. The company is also aiming to increase its annual production to 3.5 million ounces by 2025.
In 2022, AngloGold Ashanti's revenue increased by 8% to $5.237 billion, compared with $4.852 billion in 2021. The company's net profit increased significantly from $953 million in 2021 to $1.912 billion in 2022. This increase in revenue and profit is primarily due to higher gold prices and the increase in production levels.
In 2022, AngloGold Ashanti's basic earnings per share increased by 118% to $4.60, compared with $2.11 in 2021. The company's headline earnings per share increased by 124% to $4.64, compared with $2.07 in 2021.
AngloGold Ashanti is a reliable gold mining stock that has consistently delivered solid financial results. The company's production levels and forecasts, revenue and profit, and earnings per share all suggest that it is well-positioned to take advantage of the current high gold prices.
Additionally, the company's commitment to sustainability and responsible mining practices makes it an attractive investment opportunity for investors who prioritize ESG factors.
Kinross Gold Corporation (NYSE: KGC) — One Year
Kinross is a Canada-based gold mining company that operates mines in North America, South America, West Africa, and Russia, and has been a popular investment option among gold bugs.
The company has been ramping up its production over the last few years. In 2022, the company produced 2.5 million gold-equivalent ounces (GEOs), which was a 9% increase from the previous year. The company forecasts a production range of 2.4 million–2.7 million GEOs for 2023, which shows a steady growth trend.
In 2022, Kinross Gold reported a revenue of $4.8 billion, which was a 20% increase from the previous year. The company's net earnings also rose to $635.6 million, a significant improvement from the $425.9 million reported in 2021.
Kinross' EPS also saw a significant increase in 2022, standing at $0.51 compared with $0.34 in 2021. This increase is a positive sign for investors as it indicates the company is growing and making more profits.
Kinross Gold's all-in sustaining cost per GEO sold was $1,014 in 2022, which is lower than the industry average of $1,150 per ounce. This indicates that the company is effectively managing its costs and is a positive sign for investors. Overall, Kinross Gold's strong production levels, revenue growth, increasing profits, and commitment to sustainability make it an attractive investment option in the gold mining industry.
Agnico Eagle Mines Limited (NYSE: AEM) — One Year
Agnico Eagle Mines is a Canada-based gold mining company with operations primarily in Canada, Finland, and Mexico. The company's focus is on operating low-cost, long-life mines that produce high-quality gold. Agnico Eagle Mines has a strong track record of growth and profitability, making it an attractive option for investors looking for stability in the gold mining sector.
One of the key advantages of investing in Agnico Eagle Mines is the company's strong production levels and forecasts. In 2022, the company produced approximately 1.5 million ounces of gold, and it is expected to produce between 1.68 million and 1.73 million ounces in 2023. Additionally, Agnico Eagle Mines has a diversified portfolio of assets, which helps mitigate risk and ensure consistent production levels.
In terms of financials, Agnico Eagle Mines has impressive figures. In 2022, the company generated $3.2 billion in revenue and $668.6 million in net income, resulting in earnings per share of $2.63. The company's profit margin was 21%, indicating strong profitability.
Agnico Eagle Mines has also made significant investments in its future growth prospects. The company has several development projects underway, including the Amaruq underground project and the Hammond Reef project, both of which are expected to contribute to the company's production growth in the coming years.
Each of the five companies listed above — Newmont, Barrick Gold, AngloGold Ashanti, Kinross Gold, and Agnico Eagle Mines — offers unique advantages for investors. Newmont and Barrick Gold, two of the largest gold mining companies in the world, have strong production levels and forecasts, as well as impressive revenue, profit, and earnings-per-share figures. AngloGold Ashanti, while not as large as Newmont and Barrick, offers the potential for growth and increased production with its proposed joint venture to create Africa's largest gold mine. Kinross Gold has recently made significant investments in new projects and has strong growth prospects. Agnico Eagle Mines, while facing some short-term challenges, has a strong track record of growth and a diversified portfolio of assets.
As always, investing in stocks carries risks, and investors should consult with a financial adviser before making any investment decisions. However, for those willing to take on the risk, investing in gold mining stocks can provide a potentially profitable opportunity in today's market.
