Dividend Investor Insights: Five Dividend-paying Gold Stocks to Purchase for Hedging a 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. Five Dividend-paying Gold Stocks to Purchase for Hedging a Market Crash 10/04/2024 [[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...]( Five [dividend-paying gold stocks]( to purchase for hedging a market crash offer investors opportunities to buy shares in mining companies that analysts consider undervalued compared to the current price of the precious yellow metal. The five dividend-paying [gold]( stocks to purchase for hedging a market crash gained a lift from the Federal Open Market Committee's (FOMC) Sept. 18 Fed Funds rate cut of 0.50%, equaling 50 basis points. That cut likely will be followed by others that forecasters predict could total 50 basis points between the remaining two FOMC meetings this year, 100 basis points in 2025 and 50 basis points in 2026 to reach a rate of 2.9% that may hold through 2027. Courtesy of [www.StockRover.com](. Learn about Stock Rover by [clicking here](. Interest rate reductions historically have been healthy for gains in [gold prices](. Citi Research is bullish on the price of gold rising to $3,000 per ounce in 2025. That new all-time high would mark a hefty hike from the precious metal’s gold price of $2,669.50 on Friday, Oct. 4. Some [experts suggest investors have 5-10% of a given portfolio invested in gold](. A key reason is that gold acts as an insurance policy for a portfolio, since when everything else goes down, gold tends to go up. Five Dividend-paying Gold Stocks to Purchase for Hedging: Gold Provides Insurance Even though gold is unlikely to produce the stellar returns of a high-flying technology stock, it typically minimizes the downside in the event of a bubble popping, a geopolitical crisis, or some other market catastrophe. Plus, the dollars invested in gold mining stocks also can provide investors with dividend payouts. That’s the reason for compiling a list of the best five [dividend-paying]( gold stocks to purchase for hedging against a market crash. Investing in these gold mining stocks is a hedge for one's portfolio while simultaneously earning passive income through dividend distributions. Here are the five dividend-paying gold stocks to purchase as hedges against a market crash: Five Dividend-Paying Gold Stocks to Purchase for Hedging Against a Market Crash: Newmont 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. Greenwood, Village, Colorado-based Newmont Mining (NYSE: NEM) 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, leads [Successful Investing]( and co-heads [Fast Money Alert](. [[If Americans Are Not Worried About Running Out of Money, They Should Be!]( According to the Survey of Consumer Finances (SCF), nearly half of all U.S. households have no money at all saved for retirement. Among those already retired, the savings rate is better... but still only $171,000 in 2022. Yet there is simple but little-understood solution to this looming retirement crisis. If investors move [quickly enough]( they can LOCK IN a regular source of extra income with annual returns as high as 11.1%, guaranteed for life. That’s 761% greater than the average S&P 500 dividend. What’s more, these payments are NOT affected by anything going on in the stock market or in other financial markets. There’s only one downside: this rare opportunity to lock in DOUBLE-DIGIT-PERCENTAGE returns for life may not be available much longer. [Click here to find out more!]( [Click Here...]( Five Dividend-paying Gold Stocks to Purchase: Newmont Mining Citigroup rates Newmont 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. The volatility of metals pricing factors into Citigroup's 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]( Five Dividend paying Gold Stocks to Purchase for Hedging Market 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. Five 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. This transaction was no surprise since the asset previously had been put up for sale and Greatland is 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. Five Dividend-paying Gold Stocks to Purchase for Hedging: Agnico Eagle A second dividend-paying gold mining stock to buy is Agnico Eagle Mines Ltd. (NYSE: AEM), a Toronto, Canada-based company. It has gold mining 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 rising 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 climb 1% to $4.6 billion. The mining company's 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 its price estimate of $2,400 per ounce in 2024 already exceeded. For 2025, Citi foresees gold prices reaching about $2,900 per ounce, 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. [[#1 A.I. Software to Find What to Trade](]( With thousands of assets to choose from, filtering through these to find the most promising ones can be daunting. What if I told you there is a search engine like the one you love and trust, but designed for traders like you to search and dominate the markets by accessing the most timely and accurate information? If you’ve never traded with predictive analysis or leading indicators... If you feel like you don’t have the time (or knowledge) to properly conduct thorough research and analysis... [Come learn (for FREE) the #1 A.I. to find what to trade.]( [Click Here...]( Five 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, especially if the price of gold jumps, the gold mining company is acquired or unexpected exploration success occurs. I 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) Uncertainty of BofA’s gold price forecasts putting its BTG valuation at risk. Five 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, any 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]( Five Dividend paying Gold Stocks to Purchase for Hedging: Triple Flag Precious Metals The fifth dividend-paying gold stock to purchase for hedging risk is Toronto, Canada-based Triple Flag Precious Metals Corp. (NYSE: TFPM). The stock is rated as a BofA buy. BofA’s C$27.00 (US$20.00) per share price objective for TFPM is based on a target valuation multiple of 2.00x its estimated NAV for the stock. The multiple is a slight discount to senior royalty and streaming peers, giving consideration to TFPM's smaller market cap and liquidity, and less diversification by geography, commodity and operator. However, those risks are partly offset by above average margins and potential production growth. The multiple is at the high end of the range for the gold producer peers due to the attractive relative investment characteristics of the royalty & streaming business model, with accompanying precious metals exposure and insulation from inflation in operating expenditures and capital expenditures. BofA’s NAV estimate is based on a 5% real discount rate and long-term gold and silver prices of $1,850/oz and $26.00/oz, respectively (based on estimates for 2029). Risks to BofA’s price objective include 1) a lack of input the operation of portfolio assets, 2) competition from a growing royalty and streaming sector 3) precious metal price volatility, 4) asset investments in non-investment grade emerging markets, 5) concentrated ownership structure, 6) ramp-up issues at the Gunnison and Pumpkin Hollow mines. Unexpected upside for the stocks could come from: 1) higher than expected gold and silver prices, 2) future exploration discoveries and unexpected expansions at mines in the portfolio, 3) a potential acquisition of TFPM, BofA wrote. Chart courtesy of [www.stockcharts.com]( U.S Global Investors Favors Gold Miners Gold recently 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. Even so, 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 five dividend paying gold stocks to purchase for hedging against a market crash may be worth considering for investors who are open to buying the companies that mine the precious yellow metal. Such dividend-paying gold mining stocks seem to be undervalued and may be able to reward those who have the patience to wait for a heighted return. Sincerely, Paul Dykewicz, Editor [DividendInvestor.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. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul also is the author of an inspirational book, "[Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain](", with a foreword by former national championship-winning football coach Lou Holtz. 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