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3 Gold Miners With Major Upside

Stock MarketsMay 06, 2021 12:30PM ET
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© Reuters. 3 Gold Miners With Major Upside

Barrick Gold (NYSE:GOLD), Kirkland Lake Gold (NYSE:KL), and Harmony Gold (HMY) are all trading at attractive valuations and pay above-average dividends. With the outlook for gold improving, Taylor Dart explains why investors should consider these 3 miners.Three Miners To Buy On Dips

It’s been a volatile year thus far for the precious metals, and fortunately, for the bulls, the volatility is finally showing up to the upside. However, despite the Gold Miners Index (GDX (NYSE:GDX)) being more than 13% off its March lows, there are still several reasonably valued names in the sector, so sharp dips should provide buying opportunities. Below, we’ll look at three names that remain at deep discounts to their peer group and that have significant upside, even if gold (GLD (NYSE:GLD)) remains below $1,800/oz.

Barrick Gold (GOLD), Kirkland Lake Gold (KL), and Harmony Gold (HMY) have little in common with significantly different market caps, margins, and jurisdictions, but all of them share one key trait: they’re trading at double-digit free cash flow yields while paying dividends. Generally, buying at 10%+ free cash flow yields while being paid to wait makes for an excellent investment thesis, as long as the company is well-run, has attractive margins, and isn’t heavily indebted. In the case of these three stocks, they meet all three criteria, with Kirkland Lake Gold being the standout of the bunch.

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3 Gold Miners With Major Upside
 

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