In 2024, Gold has soared to record highs above $2,400 an ounce, with China playing a vital role in this significant surge. Heightened geopolitical tensions and lower interest rates have boosted yellow metal’s appeal as an investment. China demand, spanning retail shoppers to the central bank, has driven the rally.
Therefore, investors could consider investing in quality gold stocks Centerra Gold Inc. (CGAU), Gold Fields Limited (GFI), and Kinross Gold Corporation (KGC) for long-term success.
Gold, often deemed a hedge investment against market losses, has broken record-high price levels since the beginning of 2024. On April 12, gold prices set a new record high of $2,430 Oz. Also, during the first quarter of 2024, the prices have surged around 13%, fueled by interest rate cuts, central bank demand, and investors’ trust.
However, gold prices retreated slightly due to the easing fears of a wider Middle East conflict. Spot gold was down 1.2% at $2,362.09 per ounce at 9:29 GMT on April 22, and U.S. gold futures fell 1.6% to $2,376.10. Despite this, market experts anticipate continued gold strength.
The gold market is expected to reach 6.32 kilotons by 2029, expanding at a CAGR of 7.4% during the forecast period (2024-2029). Moreover, the jewelry industry accounted for a 48.7% share of the total gold demand in 2023, making it the largest gold-demanding sector closely followed by investment demand worldwide.
Moreover, investors’ interest in gold stocks is evident from the SPDR Gold Shares ETF's (GLD) 20.3% gains over the past six months.
Given these encouraging market trends, let’s look at the fundamentals of the three best Miners - Gold stocks, beginning with number 3.
Stock #3: Kinross Gold Corporation (KGC)
Headquartered in Toronto, Canada, KGC engages in the acquisition, exploration, and development of gold properties. It operates various mines, including the Fort Knox and Manh Choh projects in Alaska, the Round Mountain and Bald Mountain mines in Nevada, the U.S., the Paracatu mine in Brazil, and the La Coipa and the Lobo-Marte project in Chile.
On February 14, 2024, KGC’s Board of Directors declared a dividend of $0.03 per common share for the fourth quarter of 2023. The dividend was paid on March 21, 2024, to shareholders of record as of the close of business on March 6, 2024.
KGC pays an annual dividend of $0.12, which translates to a yield of 1.77% at the current share price. Its four-year average dividend yield is 1.95%. Moreover, the company’s dividend payouts have increased at a CAGR of 10.1% over the past three years.
In terms of forward EV/EBITDA, KGC is trading at 5.49x, 33.9% lower than the industry average of 8.30x. Likewise, the stock’s forward Price/Cash Flow multiple of 5.31 is 37.2% lower than the industry average of 8.47.
For the fourth quarter that ended December 31, 2023, KGC’s metal sales increased 3.7% year-over-year to $1.12 billion. The company's operating earnings were $193.50 million, against an operating loss of $160.10 million in the prior year’s quarter.
Also, the company’s adjusted net earnings from continuing operations attributable to common shareholders came in at $140 million and $0.11 per share, up 29.4% and 22.2% year-over-year, respectively.
Per the 2024 guidance, KGC expects gold equivalent production of 2.1 million in the full year, and production guidance for the U.S. is 730,000.
Analysts expect KGC’s revenue for the first quarter (ended March 2024) to increase 8.8% year-over-year to $1.01 billion. For the fiscal year 2024, the company’s revenue is expected to grow 2.6% year-over-year to $4.35 billion. Furthermore, it has topped the consensus EPS estimates in each of the trailing four quarters.
Shares of KGC have gained 26.1% over the past six months and 34.1% over the past year to close the last trading session at $6.77.
KGC’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
KGC has a B grade for Quality and Value. It is ranked #12 out of 42 stocks in the Miners - Gold industry.
To check other POWR Ratings of KGC for Momentum, Growth, Stability, and Sentiment, click here.
Stock #2: Gold Fields Limited (GFI)
Headquartered in Sandton, South Africa, GFI operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. The company also explores copper and silver deposits.
On March 28, 2024, GFI commenced production at its Salares Norte mine in Chile’s Atacama province by pouring its first gold-silver doré. The event marks a significant milestone for the company. The project will add considerate value to the company’s growth, expand its portfolio, and lead to value upliftment and meaningful addition to its cash flow profile.
For the fiscal year that ended December 31, 2023, GFI’s revenue increased 5% year-over-year to $4.50 billion. The company’s profit before taxation grew 5.2% from the prior year to $1.21 billion. Its profit for the year of $726.30 million indicates marginal growth from the previous year, while its EPS was $0.77 for the year.
Analysts expect GFI’s revenue and EPS for the fiscal year (ending December 2024) to grow 20.3% and 23.1% year-over-year to $5.41 billion and $1.16, respectively. Further, the company topped the consensus EPS estimates in three of the trailing four quarters.
Over the past month, the stock has surged 24.2% and 25.4% over the past six months to close the last trading session at $17.65.
GFI’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
GFI has an A grade for Quality. It is ranked #10 among 42 stocks within the same industry.
To see the other ratings of GFI for Sentiment, Growth, Momentum, Value, and Stability, click here.
Stock #1: Centerra Gold Inc. (CGAU)
Based in Toronto, Canada, CGAU operates as a gold mining company that engages in acquiring, exploring, developing, and operating gold and copper properties globally. The company’s flagship projects include the 100% owned Mount Milligan gold-copper mine in British Columbia, Canada, and the Öksüt Gold Mine in Turkey.
On February 22, 2024, CGAU announced a quarterly dividend of C$0.07 ($0.05) per common share, which amounted to around $11.20 million. The quarterly dividend was paid on March 27, 2024, to shareholders of record as of the close of business on March 13, 2024.
CGAU’s annual dividend of $0.21 translates to a yield of 3.33% at the current share price. Its four-year average dividend yield is 2.65%. Moreover, the company’s dividend payouts have increased at a CAGR of 5.9% over the past three years.
On February 14, CGAU and its subsidiary, Thompson Creek Metals Company Inc., entered into an additional agreement with RGLD Gold AG, a subsidiary of Royal Gold, Inc. (RGLD), in regard to the Mount Milligan Mine, resulting in a mine life extension to 2035 and also established favorable parameters for potential future mine life extensions.
The additional agreement with RGLD Gold AG will potentially unlock incremental mineral reserves and resources at Mount Milligan for mutual benefit.
For the fourth quarter that ended December 31, 2023, CGAU’s revenue grew 63.2% from the year-ago value to $340 million. Its reported earnings from mine operations of $138.10 million indicate growth of 318.5% from the prior year’s quarter. The company’s free cash flow was $111 million for the quarter.
Furthermore, the company’s adjusted net earnings came in at $61.20 million, or $0.28 per share, compared to an adjusted net loss of $13.70 million or $0.06 per share in the prior year’s quarter, respectively.
According to the 2024 guidance, CGAU expects full-year consolidated gold production between 370,000 and 410,000 ounces, projecting an 11% increase from the midpoint of guidance over last year’s production, and copper production is expected between 55 and 65 million pounds.
Analysts expect CGAU’s revenue and EPS for the fiscal year (ending December 2024) to grow 6.6% and 924.8% year-over-year to $1.17 billion and $0.51, respectively. Moreover, the company surpassed the consensus revenue estimates in three of the trailing four quarters.
Over the past month, CGAU’s stock has surged 11.3% and 23.1% over the past six months to close the last trading session at $6.19.
CGAU’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, translating to a Strong Buy in our proprietary rating system.
CGAU has an A grade for Growth and a B for Quality, Value, and Sentiment. It is ranked #2 in the list of 42 stocks within the Miners - Gold industry.
To see the other ratings of CGAU for Stability and Momentum, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
GFI shares fell $0.71 (-4.02%) in premarket trading Monday. Year-to-date, GFI has gained 18.58%, versus a 4.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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