The growing acceptance of cryptocurrency is beginning to make mainstream investors rethink their idea of “store of value.” The trendy possibilities of Bitcoin, Ethereum, and any of the dozens of altcoins that exist on the blockchain are trending like the latest fashion.
However, the thing about fashion is that the more things change the more things stay the same. Just like the simple black dress that won’t go out of fashion, the same can be said for precious metals stocks. One way to think about it would be to say that the existence of a growing cryptocurrency market doesn’t change the value of precious metals.
Precious metals have long been known to be a safe-haven asset in times of market volatility and economic crisis. In fact, during the Covid-19 pandemic, gold prices surged about 30% breaking the $2,000 mark for the first time in its history. This was at a time when the prices of many cryptocurrencies were falling.
And precious metals have also been seen as a hedge against inflation, which seems like more of a certainty with the Federal Reserve’s pledge to keep interest rates at historically low rates into 2023.
Whether you’re looking to take your first steps at crafting a precious metals portfolio or if you want to fine-tune the one you have, we believe this special presentation is a good place to start your research. We’ve identified seven precious metals stocks that look to retain their allure in 2021.
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- Barrick Gold
- Newmont Corporation
- Kinross Gold Corporation
- Wheaton Precious Metals
- Endeavour Silver Corp.
- Platinum Group Metals
- Coeur Mining
#1 - Barrick Gold (NYSE:GOLD)
Barrick Gold (NYSE:GOLD) is owned by approximately 53 hedge funds as of March and has nearly 60% institutional ownership. One of the most reliable metrics for looking at best stocks in a sector like precious metals is to look at institutional ownership. It’s often called the “smart money” but how I like to look at is a hedge against volatility. After all, once hedge funds and investment banks buy a stock, they are more likely to hold unto it.
Analysts are also in love with GOLD stock. 14 out of the 15 analysts that issue ratings on the company give the stock a buy or strong buy rating. The analysts also have a price target that suggests an upside of nearly 50% from the stock’s level as of this writing ($21.04).
There is no question that Barrick Gold has a high correlation with the price of the physical metal. Since reaching a high of around $30 in September (right when gold hit the $2,000/ounce mark), the stock is down nearly 30%. However, Barrick is widely considered one of the best-in-class among gold mining stocks and a logical addition to any portfolio. And for what it’s worth, the stock has moved modestly higher since the company said the window had closed for any deal with Freeport-McMoRan (NYSE:FCX).
About Barrick Gold
Barrick Gold Corporation is a sector-leading gold and copper producer. Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick.
Read More - Current Price
- $15.46
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $24.82 (60.5% Upside)
#2 - Newmont Corporation (NYSE:NEM)
When looking at precious metals stocks in general, and gold stocks in particular, Newmont Corporation (NYSE:NEM) is frequently near the top of the list. One reason that the company makes this list is that it managed to effectively mitigate the effects from the pandemic. This is one reason that the company posted a blowout fourth-quarter earnings report. Earnings more than doubled year-over-year (YOY) and revenue was up nearly 14% YOY.
And like many mining stocks, Newmont Corporation offers a dividend and managed to increase the dividend in the last quarter. This is another testament to how well the company managed the pandemic.
After falling nearly 14% in the first two months of 2021, NEM stock has rallied and recovered almost all of its losses. The company is expected to report earnings in early May. A strong report will be a bullish signal for the stock.
Newmont has nearly 80% institutional ownership and has a consensus buy rating and price target that suggests an upside for the stock of nearly 18%. The company is currently rated by 13 analysts.
About Newmont
Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana.
Read More - Current Price
- $38.28
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 9 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $54.31 (41.9% Upside)
#3 - Kinross Gold Corporation (NYSE:KGC)
Rounding out our list of the “usual suspects” among gold mining stocks is Kinross Gold Corporation (NYSE:KGC). One of the appealing elements of KGC stock is that, right now, investors can get the stock for under $10 per share.
Of the gold mining stocks we’ve looked at, Kinross has the smallest percentage of institutional ownership at around 50%. However, analysts are very bullish on the stock. 9 of the 11 analysts that rate Kinross have a buy rating with a consensus price target of $11.57 that would be a 61.34% gain from the stock’s current level.
Kinross posted better-than-expected fourth-quarter earnings that nearly doubled YOY. Revenue was also up 20% YOY. KGC stock is down 10% year-to-date but is still up nearly 20% (19.7%) for the year.
Investors who are looking for optimism can point to the management team’s expectations for production to increase by 20% in the next three years. And this growth would be concurrent with falling production costs. If that scenario occurs, getting in on KGC stock at under $10 will be a real bargain.
About Kinross Gold
Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in the United States, Brazil, Chile, Canada, and Mauritania. The company operates the Fort Knox mine and the Manh Choh project in Alaska, as well as the Round Mountain and the Bald Mountain mines in Nevada, the United States; the Paracatu mine in Brazil; the La Coipa and the Lobo-Marte project in Chile; the Tasiast mine in Mauritania; and the Great Bear project in Canada.
Read More - Current Price
- $9.25
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $11.13 (20.3% Upside)
#4 - Wheaton Precious Metals (NYSE:WPM)
Wheaton Precious Metals (NYSE:WPM) is one of the largest metals streaming companies in the world. The company pays mining companies a fixed up-front payment to help develop a project. In exchange, Wheaton gets rights to purchase a portion of the production at a fixed cost.
Of course, the company can then sell those metals at their current market price and pocket the difference. It’s an efficient business model that makes the company an attractive investment. Like the other stocks we’ve listed, Wheaton had a strong fourth quarter with earnings and revenue solidly beating expectations.
Since the beginning of 2020, institutions have been increasing their purchases of WPM stock. Currently, the stock enjoys about 60% institutional ownership.
Of the 15 analysts that offer a rating for WPM stock, 11 give the stock a buy rating. And the consensus price target of $57.73 is a 43% increase from the stock’s current price.
In the short term, Wheaton may experience a little headwind as the company digests its acquisition of Capstone Mining’s Santo Domingo Project. Although the $290 million that Wheaton is spending is not payable all at once, analysts will be looking for further guidance to see how that may affect the company’s earnings.
About Wheaton Precious Metals
Wheaton Precious Metals Corp. primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. The company was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in May 2017. Wheaton Precious Metals Corp.
Read More - Current Price
- $57.11
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 9 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $71.67 (25.5% Upside)
#5 - Endeavour Silver Corp. (NYSE:EXK)
The next stock on our list is another low-priced precious metals stock. As its name suggests, Endeavour Silver Corp. (NYSE:EXK) primarily mines silver from mines in Mexico and Chile. Many precious metals analysts are more excited about the likely growth in silver even as gold has begun to trend higher.
Unlike many stocks on this list EXK stock is down slightly in 2021. However over the last 12 months, investors have been handsomely rewarded with a gain of 231%. Among analysts the stock has a consensus buy rating with a price target of $6.31 that represents a nearly 20% gain from its current level.
Currently the company has only about 17% institutional ownership, but interest has picked up sharply in the last three quarters, most likely correlating with the rise in silver prices. An investment in EXK stock is likely to be volatile, but with institutional interest rising along with the price of silver, this could be a profitable mining stock in 2021.
About Endeavour Silver
Endeavour Silver Corp., a silver mining company, engages in the acquisition, exploration, development, extraction, processing, refining, and reclamation of mineral properties in Chile and the United States. It explores for gold and silver deposits, and precious metals. The company was formerly known as Endeavour Gold Corp.
Read More - Current Price
- $3.71
- Consensus Rating
- Buy
- Ratings Breakdown
- 5 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $6.63 (78.6% Upside)
#6 - Platinum Group Metals (NYSE:PLG)
For investors looking to invest in platinum, Platinum Group Metals (NYSEAMERICAN:PLG) looks to be an intriguing option. The company is a development-stage exploration company for platinum and palladium. However, in addition to mining those precious metals, the company explores for a range of other metals including gold.
With a beta of 2.31 this is not a stock for the risk-averse, however, PLG stock is up 144% over the last 12 months. And that’s despite being down 21% so far in 2021. A big reason for the stock’s meteoric ascent is its interest in the Waterberg project in South Africa.
Covid-19 hit projects in Africa very hard. And as supply was crimped, demand for platinum and palladium is growing. Specifically, in the case of platinum, the metal is being used in green hydrogen production processes.
Platinum Group Metals has about 32% institutional ownership but from the third quarter to the fourth quarter, an increasing number of hedge funds had a stake in PLG stock.
About Platinum Group Metals
Platinum Group Metals Ltd. engages in the exploration and development of platinum and palladium properties. It explores for palladium, platinum, gold, copper, nickel, and rhodium deposits. The company holds 50.02% interest in the Waterberg project located on the Northern Limb of the Bushveld Igneous Complex, South Africa.
Read More - Current Price
- $1.17
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - Coeur Mining (NYSE:CDE)
The last stock on our list of precious metals stocks to buy is Coeur Mining (NYSE:CDE). The company is a diversified precious metals producer that operates five mines across North America. This is one of the oldest miners, with over 90 years of experience which makes it a stable alternative despite being in a high beta sector. This is partly evidenced in the nearly 60% institutional ownership in the stock.
The company has seen a gain of over 400% since the selloff sparked by the novel coronavirus. Part of that was due to the company’s ability to get mining operations up and running at the same time that commodity prices were rising.
Investors looking to buy Coeur Mining may want to wait until the company’s earnings report is released in late April. Around that time, analysts may weigh in with a more favorable outlook. Right now, they project CDE stock to fall about 8%.
About Coeur Mining
Coeur Mining, Inc explores for precious metals in the United States, Canada, and Mexico. The company primarily explores for gold, silver, zinc, and lead properties. It markets and sells its concentrates to third-party customers, smelters, under off-take agreements. The company was formerly known as Coeur d'Alene Mines Corporation and changed its name to Coeur Mining, Inc in May 2013.
Read More - Current Price
- $5.88
- Consensus Rating
- Buy
- Ratings Breakdown
- 5 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $7.81 (32.9% Upside)
Some investors may believe that rising yields and a stronger dollar will dilute the value of precious metals. Hopefully as you’ve gone through this presentation, you can see that just as Bitcoin may be the building block for a lot of cryptocurrencies; gold is only the beginning of building a precious metals portfolio.
In fact, the “typical” precious metals portfolio is likely to include gold, silver, platinum, and palladium. The latter two are used in many of the sectors that will drive the economy forward.
And with many of those sectors expected to continue to be the growth sectors for the next several years, the table is set for nice growth in precious metals. Plus you get the peace of mind that comes from knowing they will always be a port in the storm.
Investors who are concerned about investing in a single metal or any single company (like the ones in this presentation) may want to consider one of the many precious metals exchange-traded funds that focus on precious metals.
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