Use These 3 Precious Metals Stocks to Protect Yourself From Inflation and Political Turmoil

Investors who fear inflation and political uncertainty may benefit from owning Canadian-focused precious metals stocks such as Agnico Eagle Mines Ltd. (TSX:AEM).(NYSE:AEM).

| More on:
The Motley Fool

If you have a bit of a contrarian leaning, now might be an excellent time to start looking at precious metals stocks. The metal price has gone down quite a bit over the past several weeks and stocks have come down with it. It’s starting to get to the point once again where even the best companies are becoming attractive.

With all the geopolitical risks, at this point it may be wise to look into companies in the precious metals space that have less geopolitical risks attached to them than some of their peers. Companies that operate primarily in North America, or gold and silver streaming companies that do not suffer from substantial operational risks, may be the way to go. There is no shortage of companies, but here are three companies that are starting to look good.

Agnico-Eagle Mines Ltd. (TSX:AEM)(NYSE:AEM)

Having most of its operations in Canada, Agnico-Eagle has the potential to be one of the most politically stable gold-focused mining operations in Canada. With everything happening in the world today, this stability may appeal to investors who want to be sheltered, or even benefit, from political instability. This company has a respectable balance sheet, with a large amount of cash on the books. Agnico-Eagle also pays a dividend of 1.7% at the current share price.

SSR Mining Inc.  (TSX:SSRM)(NASDAQ:SSRM)

The company operates in the Americas, with most of its operations and exploration projects being in Canada and the United States, although it does have projects in areas outside of North America in places such as Argentina. SSR Mining has an excellent balance sheet with almost double the amount of cash that it has in debt. It also produces solid free cash flow, even at these reduced prices. The company does not have a dividend, which might bother some investors, but its solid operational track record and balance sheet should make up for the lack of a payout.

Wheaton Precious Metals Corp. (TSX:WPM)(NYSE:WPM)

If you aren’t particularly pleased or excited about miners, then a good streamer might be appropriate for you. Wheaton Precious Metals, previously called Silver Wheaton, used to be primarily focused on silver. As the name change indicates, the company is now focused on many different precious metals, including a greater focus on gold. It also pays a dividend of around 2% at the current share price, which might make it more attractive to dividend investors.

Losing its luster?

It takes a strong stomach to buy when everyone else is selling. Unfortunately, the times of maximum negativity are where the best deals are often found. Gold still faces negativity from a number of fronts. Rising rates give alternative savings vehicles to gold, a strong US dollar is usually inversely relational to gold prices, and alternatives such as cryptocurrencies have drained some of the cash that may have found its way into gold investments. There is also the fear of peak gold — the thought that all the gold will be found in a few years.

Nevertheless, many financial planners and investors believe that gold deserves a place in investors’ portfolios. Given gold’s status as a safe haven investment, it may pay to have a portion of your investments allocated to it. And by picking solid companies such as the ones listed above, you can leverage gold’s potential recovery to get excellent returns from your gold holdings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kris Knutson has no position in any of the stocks mentioned. Wheaton Precious Metals is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »