3 Discounted Gold Stocks to Buy Now

Gold stocks, especially at their current discounted state, can be promising short-term investments, since they can reverse course anytime due to market dynamics.

| More on:

The TSX is down about 8.2% right now, which is less than the S&P 500 and NASDAQ, but it’s still quite a dip. Inflation is at an all-time high, and combined with a probability of a recession, it’s pointing towards a good investment opportunity: buying gold stocks. Right now, most gold stocks are heavily discounted.

Still, as more focus shifts towards them, the more rapidly they are likely to rise in the coming weeks, offering you decent capital appreciation.

A mid-cap gold stock

Centerra Gold (TSX:CG) is a Toronto-based gold mining company with a market cap of around $3 billion. It primarily operates in North America but also has a presence in Turkey. The local reserves (in Canada) are adequately substantial for a miner. Its size and its foreign interests are pretty promising as well. Apart from gold, the next largest reserves the company holds are copper.

The stock initially peaked around the Great Recession. After a massive fall between 2012 and 2013, the stock experienced a steady rise for the next five years. It has been quite cyclical in the last five years, rising and falling by substantial margins. It has fallen by about 42% from its post-pandemic peak and is ripe for a bull run if gold gets the limelight.

A large-cap gold stock

If you are looking for discounted giants in the Canadian gold mining sector, Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a senior gold mining company that has been operating for over six decades. It has an extensive operations portfolio with mines in three countries: Canada, Mexico, and Finland. Most of the company’s operational mines are in Canada.

Agnico is a smart investment not just because of its extensive 37% discount from its 2020 peak but also because of the dividend. Thanks to the recent fall, the stock is currently offering a decent yield of 2.9%. If it falls a little further and the recovery potential takes it to or beyond its 2020 peak, it might double your money in a couple of years.

A small-cap gold stock

Dundee Precious Metals (TSX:DPM) has an entirely foreign portfolio. It has mining operations in Namibia and Bulgaria. The exploration assets are also offshore in Bulgaria and Serbia. The amount of proven and probable reserves is comparable to much larger companies (by market cap). The company has also diversified its portfolio through strategic investments in other gold companies.

It’s the only gold stock on that list that experienced relatively stable and consistent growth in a few years preceding the 2020 crash. Its decline of almost 27% has also been fairly consistent. It’s also quite attractively valued with a price-to-earnings ratio of 5.1, and in addition to its capital-appreciation potential, it’s also offering a decent 2.6% yield.

Foolish takeaway

Even if a full-blown market crash is not around the corner, gold stocks can be decent additions to your portfolio. Some serve as a strong hedge against inflation, while others can offer decent long-term growth potential. While the dividends are not exactly rare for gold stocks, the yields are usually low. An over 2.5% yield from a gold stock can be considered decent enough.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends CENTERRA GOLD INC.

More on Metals and Mining Stocks

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Invest $7,000 in This Dividend Stock for $672 in Passive Income

High yield can be an essential requirement when you need to start even a modestly sized passive income with a…

Read more »

Canadian Dollars bills
Metals and Mining Stocks

2 Cheap Canadian Stocks Under $20 to Buy This November

Cheap TSX stocks such as Endeavour Silver are trading at an attractive valuation in November 2024.

Read more »

nugget gold
Metals and Mining Stocks

Is Franco-Nevada Stock a Buy for its 1.06% Dividend Yield?

A top gold stock with a modest yield is a buy for its lengthy dividend-growth streak.

Read more »

todder holds a gold bar
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell or Hold?

Investing in quality gold mining stocks that trade at a reasonable valuation could help you beat the TSX index over…

Read more »

People walk into a dark underground mine.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Buy?

Let's dive into whether First Quantum Minerals (TSX:FM) is worth buying at current levels, or if investors should sit this…

Read more »

nugget gold
Metals and Mining Stocks

Competitive? Beat the Market With These 2 Dividend-Paying Growth Gems

Investors looking to beat the market buying dividend stocks right now need to focus on this right sectors. Here are…

Read more »

nugget gold
Metals and Mining Stocks

A Canadian Billionaire Investor Sold Micron Stock and Bought This TSX Company Instead

Prem Watsa focuses on value over short-term growth.

Read more »

Concept of multiple streams of income
Metals and Mining Stocks

Is Franco-Nevada Stock a Buy for Its 1.2% Dividend Yield?

Gold royalty stocks represent a niche in the precious metals industry. They have different dynamics from mining stocks.

Read more »