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- The gold stocks that were rallying in 2020 have come to a halt, investors may use this as an entry point and grab these ‘safe haven’ stocks.
- From an investment perspective, the precious metal is considered a haven when the market is reeling under a crisis.
Gold has always been popular across the world as people continue to hold it in times of distress. From an investment perspective, the precious metal is considered a haven when the market is under a crisis. For long-term gains, investors often buy stocks of companies involved in exploration and mining of gold mines.
In 2020, when the coronavirus pandemic increased uncertainty and volatility in the markets, it was gold that got the attention of investors across the world, including Canada. The stocks of these companies soared and boosted their revenues. However, this year, the gold stocks that were rallying have come to a screeching halt. The trend has reversed, but that could be seen as an entry point for the investors who may grab the shares of companies with strong growth potential.
Here are three gold stocks you might want to explore in 2021:
Turquoise Hill Resources Ltd. (TSX: TRQ)
This is one of the stocks that is outperforming its peers and has grown in the past year. The company has a market cap of over C$ 4 billion and offers a 4.63 per cent return on equity.
The stock has skyrocketed by over 245 per cent in a year.
The stock advanced by 28 per cent YTD. In Q4 2020, the company achieved revenue of US$ 405.1 million, up by 83 per cent YoY. The cash generated from operating activities was US$ 69.5 million, up by 145.2 per cent YoY.
Franco-Nevada Corporation (TSX: FNV)
One of the top-price performers, Franco-Nevada Corporation's stock is currently between its 52 weeks high/low (C$ 222.15/133.63). The stock is 30 per cent down from its 52-week high of C$222.15 recorded on 27 July 2020 but is ~15 per cent up from its 52-week low of C$ 133.6300 on 3 March, 2021.
The scrips were priced at C$ 154 apiece at the time of filing on March 25.
After a surge during the pandemic period, the stocks of this company witnessed a sharp decline; however, it is showing signs of recovery now and is on the rise.
The stocks are up over 9 per cent in a month. The company has a market cap of $ 29 billion and offers a 6.15 per cent return on equity. It yields a quarterly-dividend of US$ 0.26.
In Q4 2020, the company's revenue from gold was US$ 208.4 million, up by 19 per cent year-over-year (YoY). In the same period, the company achieved an overall net income of US$ 176.7 million, up by 56 per cent YoY.
Aura Minerals Inc. (TSX: ORA)
A mid-tier gold producing company, Aura Minerals Inc. has a market cap of over C$ 1 billion and offers a 26.94 per cent return on equity. Recently, the company declared a dividend of US$ 60 million.
In its full-year financial results, the company achieved net revenue of over US$ 299 million, up by 32.5 per cent YoY. The net cash generated from operating activities was US$ 90 million, up by 150 per cent YoY.
This midcap stock is up over 240 per cent in the last 12 months.
The stock is ~23 per cent down from its 52-week high of C$18.3 recorded on 26 August 2020 but is over 300 per cent up from its 52-week low of C$ 3.4667 on 3 March 2021.