Newmont
This is one of the largest mining companies and a solid buy for investors who are more conservative. Newmont Corp. (NYSE: NEM) is engaged in the production of gold.
Its North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in Nevada and Cripple Creek and Victor in Colorado. The South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Australia segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Africa segment consists primarily of Ahafo and Akyem in Ghana.
It was reported over the past week that Newmont bid $16.9 billion for Newcrest, a 21% premium to last Friday’s close. BofA Securities feels this would catapult Newmont to the world’s dominant gold miner, with estimated 2023 gold production of around 8.2 million ounces. The analyst estimates the offer price is a very attractive $1,180 per ounce, or a 37% discount to the current gold price.
Shareholders receive a 4.62% dividend. Newmont stock has a $64 price objective at BofA Securities, but the consensus target is higher at $74.36. Shares closed at $48.35 on Wednesday.
Wheaton Precious Metals
This precious metals royalty stock makes good sense for more conservative investors who are looking to have exposure to the sector. Wheaton Precious Metals Corp. (NYSE: WPM) is a Canadian precious metals streaming company with approximately 60% of its revenues from the sale of silver and 40% from gold.
Under the terms of long-term contracts, the company purchases silver and gold from a variety of mines, including Goldcorp’s Penasquito mine in Mexico, Vale’s Salobo mine in Brazil, the Lundin Mining Zinkgruvan mine in Sweden, and Glencore’s Antamina and Yauliyacu mines in Peru, and then sells the silver and gold into the open market.
Wheaton Precious Metals stock comes with a 1.37% dividend. The BofA Securities price target is $49. The consensus target is $53.50. On Wednesday, the stock closed at $43.66.
The SPDR Gold Trust (NYSE: GLD) exchange-traded fund is perhaps one of the best pure plays on gold for investors. The trust that sponsors the fund holds physical gold bullion, as well as some cash. Each share represents one-tenth of an ounce of the price of gold. Note though that the fund does not pay a dividend.
Proper asset allocation should always include at least a single-digit percentage holding of precious metals like gold and silver. Not only do they hedge inflation, which may continue to be huge now and over the long term, but they can really help if the market does go into correction or bear market mode, as we are in now, because they tend to trade inverse to markets.
Originally published at 24/7 Wall St.
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