Five Dividend-paying Gold Stocks to Buy After Big Bank Woes

Five dividend-paying gold stocks to buy after several big banks recently collapsed offer a hedge against growing risks.

The five dividend-paying gold stocks to buy are poised to produce income and profits in the face of big bank woes worsened by weak risk controls. Gold is a tradition way for investors to reduce risk.

Forecasters such as the BofA Global Research Commodities team predicted several weeks ago that the price of gold would top $2,000 per ounce. Gold topped $2,000 on Friday, March 31, before closing at $1,987.00, up 21.83% since gold futures dipped to $1,630.90 less than six months ago on Nov. 3.

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Five Dividend-paying Gold Stocks to Buy As Three Big Banks Go Bust

Gold has gained attention from Bob Carlson, a pension fund chairman and leader of the Retirement Watch investment newsletter. As a risk-averse investment leader, Carlson has recommended iShares Gold Trust (IAU), which has risen dipped 0.24% in the past week, after gaining 7.94% in the last month, 8.04% in the past three months and 1.47% since the same time last year.

Carlson called gold a “crisis hedge,” since the Fed’s nine consecutive rate hikes dating back to last year have sharply increased borrowing costs. A 0.25% rate hike on March 24 put the Fed’s current level at 4.75-5%, up from 0.25-0.50% a year ago.

“Tight monetary policy is likely to trigger financial crises, such as last year’s problems in U.K. pension funds and the recent collapse of Silicon Valley Bank,” Carlson wrote to his subscribers in his April 2023 issue of Retirement Watch. “Global political conflicts also are a reason to hold gold as insurance.”

Retirement Watch head Bob Carlson meets with Paul Dykewicz.

Franco-Nevada Leads Five Dividend-paying Gold Stocks to Buy as Banks Fail

The Fast Money Alert trading service is recommending Toronto-based Franco-Nevada (NYSE: FNV). It has jumped 0.96% in the past week, 14.56% in the past month, as well as 7.08% in the past three months and in the year to date.

Led by Jim Woods and Mark Skousen, PhD, the Fast Money Alert trading service features both stocks and options. Skousen, who also heads the Forecasts & Strategies investment newsletter, is up more than 22% with his recommendation of SDR Gold ETF (NYSE: GLD).

Jim Woods co-leads Fast Money Alert.

The precious-metals-focused Franco-Nevada owns a diversified portfolio of gold, silver and platinum, along with their related royalty streams. The company does not operate mines, develop projects or conduct exploration. Instead, Franco-Nevada’s short-term financial performance is linked to the price of commodities and the production of its portfolio of assets.

Mark Skousen heads Forecasts & Strategies.

Portia Capital Chief Picks Franco-Nevada Picks as One of Five Dividend-paying Gold Stocks to Buy 

Michelle Connell, head of Dallas-based Portia Capital Management, said the instability of regional banks has enhanced the appeal of gold and other precious metals mining companies as safe havens. Investors have been flocking to them and the prices have been appreciating, she added.

“One interesting way to play precious metals is focusing on those companies that provide capital to the mining companies in exchange for the option to purchase the precious metals at lower prices,” Connell counseled. “These companies are seen as less risky than the mining pure plays. They have large portfolios of mining companies as clients and therefore are less risky than owning one or two individual mining companies.”

Michelle Connell leads Dallas-based Portia Capital Management.

Franco-Nevada is one of the companies that competes effectively in the mining financing business, Connell continued. The company offers a “unique way” to gain exposure to precious metals, she added.

Franco-Nevada is “very strong fundamentally” and has annual cash flows of more than $500 million in the last 10 years, Connell said. The company also pays a dividend to yield about 1%. The stock’s upside during the next 12-18 months could be 20% or even higher, she added.

Chart courtesy of www.stockcharts.com

Five Dividend-paying Gold Stocks to Buy for Protection: B2Gold Corp

Vancouver, Canada-based B2Gold (NYSE: BTG) is another of the five dividend-paying gold stocks to buy. Founded in 2007, B2Gold is a low-cost international senior gold producer with mines in Mali, Namibia and the Philippines.

B2Gold engages in exploration and development projects in countries such as Mali, Colombia, Finland and Uzbekistan. The company forecasts total consolidated gold production  between 1,000,000 and 1,080,000 ounces in 2023.

On Feb. 13, B2Gold announced plans to acquire Sabina Gold & Silver Corp. for $810 million. The purchase will give B2G control of Sabina’s 100%-owned Back River Gold District in Nunavut, Canada.

The Back River Gold District consists of five mineral claims along an 80-kilometer belt. The most advanced project in the district, Goose, is fully permitted, construction ready and has been de-risked with significant infrastructure currently in place, according to B2Gold’s management.

B2Gold further has strong northern construction expertise and experience to deliver the fully permitted Goose project and the financial resources to develop significant gold resource endowment at the Back River Gold District. Company management spoke of turning the district into a large mining complex.

BofA Backs B2Gold as One of Five Dividend-paying Gold Stocks to Buy

BofA Global Research rates B2Gold as a “buy,” adding that the stock trades at 1.25x estimated net asset value (NAV), based on a 10-year average gold price of $1,869. North American precious metal stocks have traded between 1.0x and 3.0x NAV and between 1.0x and 2.0x recently with a median of 1.25-1.50 times, with unhedged, growth-oriented producers in the upper end of the range.

BofA uses a 1.25x NAV multiple for BTG vs. mid-tier gold producer peers’ target multiples at 0.65x-1.75x due to its superior free cash flow generation, partly offset by low production growth. While BofA’s gold price forecast is a key driver of its rating for B2Gold, there are risks. They include political risk from Mali, Nicaragua, the Philippines, Namibia and Colombia, mine plan estimates in excess of BTG reserves, lack of commodity diversification, mine plans that are based on outstanding permits or approvals and potential unfavorable changes in currencies.

Further key risks could be unexpected jumps in input costs such as the price of oil and labor, along with the chance it could lose its social license to operate at any of its mines or projects. Outperformance could come from gold price increases, possible BTG acquisitions and unexpected exploration success.

Chart courtesy of www.stockcharts.com

Five Dividend-paying Gold Stocks to Buy: Barrick Gold

Toronto-based Barrick Gold (NYSE: GOLD) is recommended as a BofA buy and received a price objective of $25.00 per share. The valuation is based on the stock trading at 1.50 times the investment firm’s estimated net asset value.

Historically, North American precious metal stocks have traded between 1 and 3 times net asset value (NAV), with unhedged, growth-oriented producers that have their assets in relatively geopolitically stable regions near the upper end of the range. BofA refrained from giving GOLD a higher valuation than it did partly due to Barrick’s stable gold output.

Risks to Barrick Gold attaining BofA’s price objective include potential commodity price weakness, any problems securing financing for expansion or development projects, possible unforeseen operating challenges and political or legal risks in regions where the company does business. Further risks feature rising capital and operating costs, plus rising interest rates, as well as delays in the development of the company’s growth projects.

Chart courtesy of www.stockcharts.com

Newmont Mining Joins Five Dividend-paying Gold Stocks to Buy

Newmont Mining (NYSE: NEM), a profitable recommendation of the Home Run Trader advisory service led by Skousen, is rated a BofA “buy.” The company is a recent recommendation but already is ascending. Skousen has recommended Newmont successfully in the past and produced double-digit-percentage profits in its call options.

With a market cap of $38 billion, Newmont has mining operations in the United States, Australia, Peru, Indonesia, Canada, New Zealand, Ghana and Mexico. Approximately 70% of its mines are in North America and Australia, giving the company less political risk than most gold miners.

In 2019, Newmont Mining, of Greenwood Village, Colorado, acquired Goldcorp, gaining new mines and additional assets. The company is the world’s largest gold mining operation and has more than 100 million ounces of proven and probable gold reserves. It also produces silver, copper and zinc, while running a merchant banking operation.

The stock is inexpensive by trading at just 15 times prospective earnings for the next 12 months, according to BofA. Skousen forecast its earnings per share will rise from $2.85 in 2022 to more than $5 in 2023. That hinges on no uptick in the price of gold, Skousen predicted.

With all-in costs of $1,150 per ounce, profits will grow dramatically if gold prices move higher, Skousen concluded. Investors also can be paid for their patience in holding the stock with a 3.3% dividend yield.

Chart courtesy of www.stockcharts.com

Five Dividend-paying Gold Stocks to Buy for Protection from Threats: Triple Flag

Triple Flag Precious Metals Corp. (NYSE: TFPM; TSX: TFPM) provides structured financing solutions that are designed to serve its mining partners. Like Franco-Nevada, Toronto-based Triple Flag serves as a finance partner to facilitate development and expansion of mining projects.

The company is another BofA buy recommendation that focuses on cash-generating mines and construction-ready, as well as fully permitted projects that are two years or less to producing cash flow. That goal is balanced by Triple Flag’s search for “prudent investments” across earlier stages of the mine life cycle to maintain exposure to a robust collection of development-stage assets to grow free cash flow per share over the long term, according to its management.

A high proportion of its financing deals originate from referrals by existing counterparties, as well as by the company’s network of contacts. Those leads produce bilateral discussions with potential partners, rather than auctions.

Risks to Triple Flag achieving BofA’s price objective for it include a possible underperformance of its operating assets, competition from a growing royalty and streaming sector, precious metal price volatility, asset investments in non-investment grade emerging markets, concentrated ownership structure and possible ramp-up issues at the Gunnison and Pumpkin Hollow mines. Catalysts could include higher-than-expected gold and silver prices, future exploration discoveries and unexpected expansions at its mines, and a potential acquisition.

Chart courtesy of www.stockcharts.com

Russia Fires Cruise Missile into the Sea of Japan as a Military Test

Russia’s hawkish former President Dmitry Medvedev said on Friday, March 24, that his country’s military may send troops back to Kyiv. That warning came despite Russia’s current struggles in its ongoing invasion in eastern Ukraine. Medvedev, now the deputy chairman of Russia’s Security Council, has repeatedly spoken about possible new offensives since the war in Ukraine started on Feb. 24, 2022. “Nothing can be ruled out” about Russia’s war effort, news reports quoted Medvedev saying.

The ominous warning was followed on Tuesday, March 28, with Russia’s Pacific Fleet firing supersonic anti-ship cruise missiles at a mock target in the Sea of Japan. The Russian Defense Ministry issued a statement that the combat exercise involved Russia firing supersonic, Moskit anti-ship cruise missiles at a “mock enemy,” and hitting the target.

News reports quoted Japan’s foreign minister saying his country will remain vigilant against Russia’s military operations. Russia’s firing of cruise missiles in the Sea of Japan came just one week after Japan’s Prime Minister Fumio Kishida visited Ukraine’s President Zelensky in Kyiv on Tuesday, March 21.

Also on March 21, China’s President Xi Jinping met with Russian President Vladimir Putin in Moscow. Xi called Putin a “dear friend,” even though the International Criminal Court issued an arrest warrant for Russia’s president on Friday, March 17. The warrant accused Putin of having responsibility for war crimes in Ukraine that followed the invasion he ordered more than a year ago.

Putin committed the “war crime” of overseeing the unlawful abduction and deportation of children from Ukraine to Russia, among other offenses, the court stated in a press release. The visit by President Xi appears aimed at blaming the war in Ukraine on the United States and its allies, analysts said. Putin called the attack on Ukraine a “special military operation,” but it has grown into an extended war of 401 days, as of March 31, even though Russia’s leaders reportedly expected a quick military victory.

CDC Shows Vaccinations Against New Bivalent Variant of COVID-19 Keep Climbing

The U.S. Centers for Disease Control and Prevention (CDC) reported rising vaccination rates against COVID-19 and its bivalent variant. The CDC reports that 269,955,210 people, or 81.3% of the U.S. population, have received at least one dose of a COVID-19 vaccine, as of March 29. People who have completed the primary COVID-19 doses totaled 230,368,815 of the U.S. population, or 69.4%, according to the CDC. Also on March 29, the United States had given a bivalent COVID-19 booster to 51,580,927 people who are age 18 and up, equaling 20.0%. Vaccinations should help consumers shop, travel and spend money to support the economy.

The five dividend-paying gold stocks to buy present companies that serve as a hedge against economic fallout. All five could lure investors who want safety from threats such as bank failures, Russia’s raging war against Ukraine and provocative military threats in Asia.