Investors and consumers are facing the worst bout of inflation in over 30 years, and the data from last week were grim indeed. The October 2021 Consumer Price Index rose 0.9% on a seasonally adjusted basis and rose 6.2% over the past year, not seasonally adjusted. Over the past 12 months, the all items index increased 6.2% before the seasonal adjustment.
Add in the dreadful Producer Price Index numbers (measuring wholesale prices), which rose 0.6% in October and translated into an 8.6% increase year over year (the highest annual pace in records going back nearly 11 years) and you have a very troubling outlook.
The question for investors is what to do now. One of the best ideas always has been to seek positions in commodities, and the best area for investors to look at is the top gold miners and royalty companies. We screened the BofA Securities research universe, looking for the top gold stocks, and found five that look like great ideas for worried investors now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Agnico Eagle Mines
This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold-mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.
The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983. The stock was crushed as gold sold well off the January highs, and with an inflation surge you can bet many savvy portfolio managers are ready to add back top companies like this.
Shareholders receive a 2.45% dividend. The BofA Securities price target on Agnico Eagle Mines stock is $67. The Wall Street consensus target is up at $99.13, and shares closed Friday’s trading at $57.07.
Barrick Gold
This is another top gold stock and it still offers a solid entry point. Barrick Gold Corp. (NYSE: GOLD) and Randgold Resources completed their merger on January 1, 2019. This created the world’s largest gold company in terms of production, reserves and market capitalization.
The company holds a 50% interest in the Veladero mine located in the San Juan Province of Argentina; 50% interest in the KCGM, a gold mine located in Australia; 95% interest in Porgera, a gold mine located in Papua New Guinea; 50% interest in the Zaldavar, a copper mine located in Chile; and 50% interest in the Jabal Sayid, a copper mine located in Saudi Arabia.
Barrick also owns gold mines and exploration properties in Africa and gold projects located in South America and North America. It also has a strategic cooperation agreement with Shandong Gold Group.
Barrick Gold stock investors receive a 1.73% dividend yield. BofA Securities has a $26 price target, while the consensus target is $33.06. Friday’s closing share price was $20.75.
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