5 Gold Stocks Worth Their Weight

Barrick Gold

• Market value: $28.0 billion
• TipRanks consensus price target: $26.22 (65.7% upside potential)
• TipRanks consensus rating: Moderate Buy

Barrick Gold (GOLD (opens in new tab), $15.82) is a Canadian mining company that produces gold and copper. It has operating mines and projects in 18 countries including Africa, Saudi Arabia, Papua New Guinea and North and South America.

The company is one of the best gold stocks for income investors, boasting a dividend yield of 2.6% – well above the S&P 500's current yield of 1.6%. The company also implemented a new dividend policy earlier this year where it will combine a base quarterly payout of 10 cents per share with a performance dividend. For Q1, that worked out to be a dividend payment of 20 cents per share.

"Our strong operating performance and robust net cash balance has allowed us to provide an enhanced dividend to our shareholders," said Graham Shuttleworth, senior executive vice president and chief financial officer of Barrick Gold, in the press release. "We believe this shows the benefit of the Performance Dividend Policy that we announced in February, including the guidance it provides to our shareholders on future dividend streams."

At the end of Q1, GOLD's net cash balance stood at $743 million, while operating cash flows declined 22.8% year-over-year to $1.0 billion. However, Barrick Gold still expects to be on track to achieve its gold production targets of 4.2 million and 4.6 million ounces in 2022.

However, Jeffries analyst Chris LaFemina remains sidelined on the stock with a Hold rating and a $23 price target. Still, that implies upside potential of 45.4% to current levels.

The analyst is of the view that GOLD stock could outperform "shares of other major North American gold miners," but is "less optimistic about the potential for these shares to outperform the shares of our preferred non-gold miners."

This is because LaFemina expects that the average price of gold will settle around $1,500 per ounce over the long term.

Overall, the Street is cautiously optimistic here, with eight Buys and four Holds among analysts that have sounded off over the past three months. See the full rundown of analyst ratings for GOLD on TipRanks. (opens in new tab)

Wheaton Precious Metals

• Market value: $15.3 billion
• TipRanks consensus price target: $51.43 (51.9% upside potential)
• TipRanks consensus rating: Strong Buy

Wheaton Precious Metals (WPM (opens in new tab), $33.87) is a company that generates revenues primarily from the sale of cobalt and precious metals. The streaming company enters into precious metal purchase agreements (PMPA) to acquire "all or a portion of the precious metals or cobalt production from mines located around the globe for an upfront payment and an additional payment upon the delivery of the precious metal or cobalt."

The company currently has such agreements for 13 development stage projects and 23 operating mines.

In the first quarter, WPM's revenues declined 5.2% year-over-year to $305 million, while adjusted net earnings fell 2.2% to 35 cents per share.

Still, "Wheaton once again had a solid start to the year, generating over $210 million in operating cash flow and continuing to return value to our shareholders through our competitive dividend," said Randy Smallwood, president and CEO of Wheaton Precious Metals.

While KeyBanc analyst Adam Josephson approved of the results overall, the analyst remained concerned with the 4% lower production of gold-equivalent ounces (GEOs) at WPM's Salobo mine in Brazil.

"Salobo has had more than its fair share of problems over the past two years, and Q1 was a difficult quarter as well," Josephson said.

However, the analyst added that Vale (However, the analyst added that Vale (VALE), the operator of the Salobo mine, says the problems at the mine are not expected to adversely impact total 2022 production. (opens in new tab)), the operator of the Salobo mine, says the problems at the mine are not expected to adversely impact total 2022 production.

WPM still expects its production this year to be in the range of 700,000 to 760,000 GEOs, which, according to Josephson, "implies a significant pickup in the latter three quarters of the year; we assume Salobo is the biggest source of the expected sequential improvement."

The analyst continues to be bullish toward WPM stock with a Buy rating and a price target of $54.48, implying potential upside of 61% to current levels.

And Josephson is in good company. WPM is the first of the Strong Buy-rated gold stocks featured here, thanks to seven Buys and just two Hold ratings among analysts who have released notes on the stock over the past three months. Check out other analysts' price targets and analysis for WPM at TipRanks. (opens in new tab)

Agnico Eagle Mines

• Market value: $19.5 billion
• TipRanks consensus price target: $71.30 (66.9% upside potential)
• TipRanks consensus rating: Strong Buy

Agnico Eagle Mines (AEM (opens in new tab), $42.71) is a Canadian gold mining company. Founded in 1957, AEM produces gold and silver from mines in Canada, Australia, Finland and Mexico.

The company currently has a pipeline of projects involved in exploring and developing existing mineral deposits in the U.S. and Colombia to improve the gold and silver production profile. However, Agnico Eagle Mines is primarily a gold producer.

AEM delivered upbeat Q1 results as revenues soared 40% year-over-year to $1.3 billion, beating the analysts' median projection by $71.4 million. Earnings came in at 28 cents per share, falling short of analysts' estimates by 4 cents per share.

Additionally, buoyed by strong gold prices, AEM generated robust cash flows from operations of $507.4 million, up 38.4% year-over-year, which enabled the company to fund its quarterly dividend of 40 cents per share. The mining giant also reduced its gross debt following the first quarter with a cash repayment of $125 million. As on March 31, AEM's net debt stood at $503.7 million.

Even with these upbeat results, AEM has struggled alongside its fellow gold stocks in recent months, down 19.6% for the year-to-date. Still, it remains one of the best growth stocks for the rest of 2022.

And plenty of Wall Street pros remain upbeat toward the stock, including Barclays analyst Matthew Murphy, who has a $70 price target – well above current levels. When it comes to AEM's carbon reduction projects, they "can be achieved without a carbon price and without destroying value," Murphy says.

Eight of nine analysts surveyed by TipRanks categorize AEM stock as a Buy. Hear what else the pros have to say about AEM on TipRanks. (opens in new tab)

Osisko Gold Royalties

• Market value: $1.8 billion
• TipRanks consensus price target: $17.85 (80.1% upside potential)
• TipRanks consensus rating: Strong Buy

Osisko Gold Royalties (OR (opens in new tab), $9.91) is based out of Canada. OR is a precious metal royalty company that "holds a North American focused portfolio of over 165 royalties, streams and precious metal offtakes."

In Q1, Osisko earned gold equivalent ounces of 18,251 versus 19,960 in the same period last year. The GEOs indicate the number of ounces of gold produced during a particular period, including the number of ounces of silver produced during a specific period, which is expressed in more ounces of gold.

OR's revenues dropped 11.2% year-over-year to C$59.4 million in the first quarter, while adjusted per-share earnings came in at C$0.01 per share versus C$0.11 in the same period a year ago. However, cash flows from operating activities were up 10.8% at C$23.6 million.

While RBC Capital analyst Josh Wolfson pegged the results as "in line," he did say that the company's free cash flows of C$18 million had slightly reduced due to higher capex.

Still, the analyst remains optimistic about OR being on track to achieve its 2022 production guidance of GEOs in the range of 90,000 to 95,000. And "go-forward results will improve with Renard's stream resumption, Mantos' expansion, and Eagle seasonality," he adds.

Wolfson has a Buy rating on OR. And while his price target of $15 is the lowest on the Street, it still implies potential upside of 51.42% to current levels. Shares of OR have fallen by 19.1% this year, creating an attractive buying opportunity for investors seeking out the best gold stocks.

Wolfson isn't alone in his bullish outlook, with seven out of eight analysts surveyed by TipRanks rating OR stock a Buy. See what else the pros have to say about OR on TipRanks. (opens in new tab)

Sibanye-Stillwater

• Market value: $6.5 billion
• TipRanks consensus price target: $17.98 (97.8% upside potential)
• TipRanks consensus rating: Strong Buy

Sibanye-Stillwater (SBSW (opens in new tab), $9.09) was established in 2013, and over the years, has diversified from being a South African-based gold miner to a global producer of platinum group metals and battery metals. SBSW IS also invested in a lithium hydroxide project in Finland and, earlier this year, acquired a nickel hydrometallurgical processing facility in Sandouville, France.

The company's operations in South Africa took a hit this year amid a months-long lockout of its gold mines following a wage dispute with the labor union. However, in June, the company signed a three-year wage agreement, clearing the way for production to resume.

In Q1, SBSW produced 137,091 ounces of gold at an average gold price of $1,873 per ounce. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the first quarter, however, declined 32.2% year-over-year to $898 million. The mining company acknowledged in its quarterly update that, amid geopolitical uncertainty, prices of precious metals remained volatile.

Even Deutsche Bank analyst Liam Fitzpatrick echoed this view in his recent research report when he reduced his price targets and earnings estimates for companies in the metals and mining sector, saying he expects reduced global demand for these commodities, excluding China.

SBSW was one of many gold stocks on Fitzpatrick's list, with the analyst lowering his price target to $14 from $17 while still keeping a Buy rating on the shares.

The top-rated analyst also factored in a recession in the U.S. next year, resulting in his estimate of metal prices in 2023 to be below spot and consensus price estimates. While an uptick in demand in China could be the silver lining to this bearish outlook, an earlier recession in the U.S. "presents the clear downside risk to this view," Fitzpatrick stated in his research note.

Overall, the Street continues to be upbeat here, with four Buys and one Hold among analysts that have sounded off over the past three months. Interestingly, while the African stock is down 27.5% year-to-date, Fitzpatrick's price target of $14 implies additional upside potential of 58.2% to current levels. TipRanks offers up a full analyst rundown of SBSW shares. (opens in new tab)