Stock Investor Insights: Four Dividend Paying Gold Stocks to Purchase to Hedge Against Market Crash

You are receiving this email because you signed up to receive our free e-letters, or you purchased a product or service from its publisher, Eagle Financial Publications. Four Dividend Paying Gold Stocks to Purchase to Hedge Against Market Crash 10/01/2024 [[Have You Seen This $11 Trillion 'Tech Strip?']( While many folks today are wondering what to do with their money… a revolutionary “sheet” of new technology has quietly sparked an $11 trillion tech revolution. Investors who get in FIRST have a rare chance to position themselves in front of a tsunami of profits. [Click here to see how anyone can profit fast.]( [Click Here...]( Four dividend paying gold stocks to purchase to hedge against a market crash feature mining companies that may be undervalued compared to the price of the precious yellow metal itself. The four dividend paying gold stocks to purchase to hedge against a crash are buoyed by a recent Federal Open Market Committee (FOMC) rate cut that could be followed by others in the months ahead. Interest rate reductions historically have been healthy for gains in gold prices. Citi Research is bullish on the price of gold with a favorable forecast of $3,000 per ounce in 2025. That new all-time high would mark a hefty hike from the precious metal’s Friday, Sept. 27, closing price of $2,673.40. Four Dividend paying Gold Stocks to Purchase for Hedging May Ascend Citigroup’s third-quarter estimates for the price of gold are above consensus but reflect mark-to-market delays on the precious metal’s prodigious pop. However, there is still plenty of room for upward re-rating if gold prices can stay strong and mining companies can deliver operationally. BofA Global Research’s 2024 targets for gold price per ounce of $2,368, $2,538 and $2,643 already have been reached. The next BofA target level is about $2,733 per ounce and it appears well within reach. “But we cannot suggest chasing gold now because positioning and momentum are at or near record stretched levels,” Citigroup wrote in a recent research note. Newmont was a successful recommendation in the [Fast Money Alert]( trading service co-led by Mark Skousen, PhD, and Jim Woods. They produced a gain of nearly 19% for their [Fast Money Alert]( subscribers with a recommendation in NEM earlier in 2024. A related options recommendation produced potent returns that averaged 288.92%, after the position was sold in two parts. Ben Franklin scion Mark Skousen, who heads [Fast Money Alert]( and [Forecasts & Strategies]( talks to Paul Dykewicz. Jim Woods, a former U.S. Army paratrooper, [Successful Investing]( and co-heads [Fast Money Alert](. Four Dividend paying Gold Stocks to Purchase: Newmont Mining Citigroup rates Greenwood, Village, Colorado-based Newmont Mining (NYSE: NEM) as a buy with a target price of $57 per share due to a 1.2x price/net asset value (NAV) multiple that is in line with the investment bank’s global gold coverage. The investment firm is assuming a weighted average cost of capital (WACC) of about 5.0% and a long-term gold price of $1,600 per ounce. Despite the buy recommendation, keys risks to Citigroup’s investment thesis and valuation on NEM include commodity exposure, political risk -- particularly with its Africa operations -- and operating risk. If the impact from the risks outlined turns out to be greater or less than estimated, the shares could fail to reach or may exceed Citigroup’s target price, its equity research analysts wrote. Metals pricing volatility factors into the evaluation of Newmont. Gold pricing is driven by several market factors, including mining output, scrap availability, central bank sales and U.S. inflation rates, Citigroup wrote. Chart courtesy of [www.stockcharts.com]( Four Dividend paying Gold Stocks to Purchase for Hedging to Retain Risks “A significant decline in the price of gold due to any combination of these factors could reduce NEM’s realized pricing and sales volumes,” Citigroup wrote. “However, an increase in the gold price would be a benefit. NEM is also exposed to volatility in copper and silver pricing.” Newmont’s mining operations are subject to variability in ore quality and structural issues, which could potentially decrease production volumes and increase unit costs, Citigroup cautioned. However, better ore quality and structural efficiency would be a positive and constitute upside potential, the investment bank added. Plus, Newmont has projects in the pipeline that face execution risks. The process to bring a development project to production has many hurdles that include financing, permitting, regulatory compliance, staffing and construction. Any unexpected issues or delays could affect project delivery, increase project development and operating costs, and reduce the net present value (NPV) of projects, Citigroup counseled. [[Retirement in a Box: From Zero to $2,500 a Month]( There is a way retirees can collect thousands of dollars per month for the rest of their lives -- tax-free. Plus, this tax-free income source is 100% legal and approved by the IRS. And here’s the kicker: even if they don’t have enough money put away yet for retirement... even if they’re over age 60... they can still get thousands of dollars a month from this opportunity. [Click here to find out more.]( [Click Here...]( Four Dividend paying Gold Stocks to Purchase for Hedging: Newcrest Synergies from Newmont’s 2023 merger with Australia-based Newcrest could affect the share price of the combined company, Citigroup wrote. Plus, Newmont has announced the sale of its Telfer mine and a 70% stake in the Havieron project in Australia to Greatland Gold for US$475 million, or 0.8% of its market capitalization. This transaction was no surprise with the asset previously put up for sale and Greatland as the joint venture partner at Havieron. The payment is a mix of upfront cash of $208 million, Greatland stock valued at $168 million and contingent cash of $100 million. The transaction will also remove US$337 million of reclamation and other liabilities from NEM's balance sheet, Citigroup wrote. Newcrest estimated the value of these assets at US$500-600 million last year at $1,900-2,000 per ounce of gold, but investor expectations were dimmed due to a recently disclosed tailing dam leak. On balance, Citigroup views the transaction as neutral for NEM stock with the bulk of payment linked to the future success of the operations. Four Dividend paying Gold Stocks to Purchase for Hedging: Agnico Eagle A second gold mining stock to buy is Agnico Eagle Mines Ltd. (NYSE: AEM), a Toronto, Canada-based gold producer with operations in Canada, Finland, Australia and Mexico. The mining company’s exploration and development activities also extend to the United States. Agnico Eagle has full exposure to higher gold prices consistent with its policy of no-forward gold sales. Citigroup wrote in a recent research note that it forecasts AEM’s 2024 estimated earnings before interest, taxes, depreciation and amortization (EBITDA) to rise 1% to $4.6 billion and 2025 estimated EBITDA remains flat at $5.8 billion. The price target that Citigroup has set for AEM is US$80 per share, based on 1.2x price/NAV multiple and Citi’s bullish view on gold prices. Re-investment going forward should climb as projects are built to offset depleting marginal assets, but capital intensity appears relatively modest, Citigroup analysts wrote. The Citi Commodity team remains bullish on gold with an already exceeded price estimate of $2,400 per ounce in 2024 and about $2,900 per ounce in 2025, materially increasing earnings estimates even with elevated costs. Chart courtesy of [www.stockcharts.com]( The [Fast Money Alert]( trading service also helped its subscribers profit handsomely by recommending AEM options and stock for just two months earlier in 2024. The options soared 144.29%, while the stock price climbed 21.03% before the trading service leaders recommended taking profits. [[Where are the record-setting stocks going?](]( Wondering if you should be bullish or bearish on Nvidia for the remainder of the week? Don't worry about "buying the news" or getting scared into selling when the A.I. can guide your way. In other words, be rational. The same A.I. that predicted the banking crisis, housing market crash and Covid crash recently forecasted 2 massively bullish moves for Nvidia. [Join me LIVE to learn how we're trading this ticker and 3 more with this A.I. forecast](. [Click Here...]( Four Dividend paying Gold Stocks to Purchase for Hedging: B2Gold Corp. Vancouver, Canada-based B2Gold Corp. (NYSE: BTG; TSE: YBTO) received a price objective of US$3.85/C$5.20, based on the stock trading at 1.00x the estimated net asset value BofA Global Research projected for the miner. Historically, North American precious metal stocks have traded between 1.0x and 3.0x NAV and between 1.0x and 2.0x more 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 1.00x NAV multiple for BTG vs. mid-tier gold producer peers' target multiples of 0.65x-1.75x due to superior free cash flow generation. That outperformance is partly offset by low production growth, BofA continued. Potential outperformance for BTG could occur. Potential reasons include further increases in the price of gold, the possibility for BTG to be acquired and unexpected exploration success. I personally own BTG and have held onto it largely for those reasons. Chart courtesy of [www.stockcharts.com]( Investors also should be aware that downside risks remain that could prevent BTG from achieving BofA’s projected valuation. They include: 1) political risk from mining in Mali; 2) mine plan estimates in excess of BTG reserves; 3) lack of commodity diversification; 4) mine plans based on outstanding permits or approvals; 5) unfavorable changes in currencies; 6) unforeseen increases in input costs such as the price of oil and labor; 7) the possibility BTG could lose its social license to operate at any of its mines or projects; 8) potential cuts to the dividend or reduced capital return 9) issues with the ongoing construction and ramp-up of the Goose project. 10) BofA’s gold price forecast is also a risk to our BTG valuation/forecasts. Four Dividend paying Gold Stocks to Purchase for Hedging: Barrick Gold BofA’s price objective for Toronto, Canada-based Barrick Gold (NYSE: GOLD) is $24.00 per share and is based on the stock trading at 1.00 times the investment bank’s estimated net asset value (NAV) for the mining stock. Historically, North American precious metal stocks have traded between 1-and-3 times NAV, with unhedged, growth-oriented producers that have assets located in relatively geopolitically stable regions occupying the upper end of the range, BofA wrote. BofA further wrote that it shied away from assigning a higher target P/NAV multiple due to Barrick's stable gold output. Risks to reaching BofA’s price objective for Barrick Gold are commodity price weakness, the inability to secure financing for expansion or development projects, unforeseen operating problems, political or legal challenges in the regions in which the company operates, rising capital and operating costs and delays in the development of its growth projects. Chart courtesy of [www.stockcharts.com]( U.S Global Investors Favors Gold Miners This week, gold futures closed at $2,674.00, up $27.80 per ounce, or 1.05%, according to U.S. Global Investors. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher by 0.57%. Gold hit another all-time high as traders parse the latest remarks from Federal Reserve officials about the timing and speed of future interest rate cuts based partly on key U.S. economic data. Gold bullion hit a record of $2,640.11 an ounce, beating the previous all-time high. Frank Holmes, CEO and chief investment officer at U.S. Global Investors, wrote that some investors may be hesitant to buy gold at current prices. But he countered that several reasons exist to expect the rally to have room to run. One is that central banks around the world are entering a new phase of monetary easing. As a result, investors, and specifically Western retail investors, are starting to recognize gold’s value as a “hedge” against inflation and global uncertainty. Credit: Merk Investments, Bloomberg The real opportunity may not be in physical gold itself or the exchange-traded funds (ETFs) tracking it, Holmes indicated. Instead, he opined that “deeply undervalued” gold mining stocks have yet to catch up to the price of bullion. At the heart of this gold rally is the Federal Reserve’s recent policy shift, Holmes continued. The Fed made a decisive 50-basis-point (bp) rate cut late last month, lowering the opportunity cost of holding a non-yielding asset like gold, he added. It could be just the beginning, Homes added. Analysts and market watchers expect another 50bps of easing this year, followed by an additional 100bps in 2025. This aggressive easing cycle should further increase the appeal of gold as a store of value, he added. When interest rates are low, investors have historically tended to move away from traditional fixed-income assets like bonds, which offer lower returns, Holmes said. As a result, they’ve looked for alternative investments, and gold has long been one of the most popular hedges against inflation and financial instability, he continued. Central banks also are playing a massive role. In recent years, these institutions have increased their gold reserves sharply, Holmes stated. Their buying spree shows no signs of slowing down, he added. For example, central bank purchases now account for about a quarter of total global gold demand, which is double what it was before 2022, Holmes wrote. Gold-buying reached a new record high of 483 tonnes in the first half of the year, a 5% increase over the same period in 2023, according to the World Gold Council (WGC). Credit: Merk Investments, Bloomberg While the spotlight has been on gold prices and ETFs, gold mining stocks remain highly undervalued by comparison, according to Holmes. For the past couple of years, shares of gold mining companies have underperformed relative to gold itself, primarily due to rising costs and a general lack of interest. The four dividend paying gold stocks to purchase to hedge against a market crash may be worth considering for investors who are open to buying the companies that mine the precious yellow metal. Such gold mining stocks seem to be undervalued and may be able to reward those who have faith and the patience to wait for a heighted return. Sincerely, Paul Dykewicz, Editor [StockInvestor.com]( About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of [StockInvestor.com]( and [DividendInvestor.com]( a writer for both websites and a columnist. 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