ABX, FNV, BTO, YRI & BAU :5 Canadian gold stocks if you fear recession

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ABX, FNV, BTO, YRI & BAU :5 Canadian gold stocks if you fear recession

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 ABX, FNV, BTO, YRI & BAU :5 Canadian gold stocks if you fear recession
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Highlights

  • In April, Deutsche Bank predicted the US will see a recession
  • A recent poll found at least four in five Canadians are, in some way, concerned about an oncoming recession
  • Some Canadian economists are more sanguine about their economy

Inflation, stagflation, correction and now recession, these fear-inducing words have been making the rounds in economic discourse in recent months.

In April, Deutsche Bank predicted the US will see a recession. It implied the pace of interest rate hikes would likely hurt the economy.

Some Canadian economists are more sanguine about their economy and expect economic growth even after factoring Bank of Canada’s rate hikes.

As a commodity, some investors tend to turn to gold as a safe haven amid inflation and recession. As an investment instrument, it is in the green year-to-date (YTD), which is more than can be said about some other investments (looking at you Netflix).

One way to invest in gold is via gold stocks of miners. Let’s explore a few Canadian ones.

Barrick Gold Corp (TSX:ABX)

With a market cap C$47 billion, Barrick stands head and shoulders above other Canadian gold miners in terms of size.

ABX closed at C$26.56 Thursday, May 19. In 2022, so far, it has grown 10.4 per cent. It is still 21 per cent below it 52-week high of C$33.50 seen on March 8. 

ABX’s price-to-earning (P/E) ratio, essentially how many dollars needs to be invested in it for one dollar’s gain, is 18.6. A dividend payer, its dividend yield is nearly two per cent.

Franco-Nevada Corporation (TSX:FNV)

FNV closed Thursday at C$178 and this week it has risen 1.5 per cent. Its YTD gain is 1.75 per cent.

FNV has a P/E ratio of 35.2. It pays a quarterly dividend US$0.32 and its dividend yield is 0.92 per cent.

Dividend yield is the stock’s dividend payout relative to its price. It is dividends paid divided by share price.

B2Gold Corp (TSX:BTO)

B2Gold has a market cap of C$5.6 billion and mining interests spread across four continents. At market close Wednesday, BTO stood at C$5.32.

On the rebound, it is up 7.3 per cent in a week, which puts it up about seven per cent YTD. Over nine months, it is up over 12 per cent.

Its P/E ratio of 10.1 and dividend yield of 3.84 per cent are both the best in this list.

Yamana Gold Inc (TSX:YRI)

YRI closed Thursday at C$6.74 after spiking nearly three per cent during the day. Its return this year has been noteworthy, up 27 per cent YTD.

On April 18, it hit a one-year high of C$8.05. Its P/E ratio is 33.5 and its dividend yield is 2.3 per cent.

Also read: WEED, HEXO, TLRY, OGI & ACB: 5 TSX cannabis stocks for retail investors

Blue Star Gold Corp (TSXV:BAU)

While the above four companies trade on the TSX, this Nunavut explorer trades its stock on the TSXV, where it closed Thursday at C$0.65.

In terms of size, it is much smaller than the above relatively established companies with a market cap of C$32.6 million and so, the stock might be more volatile than the other stocks here.

However, that also means its growth can be more rapid and BAU has rocketed over 51 per cent so far in 2022.

In terms of valuation metrics, there isn’t much to write home about, but Blue Star is the rising star of this list, having gained over 91 per cent quarter-to-date.

Bottom line

A recent poll found at least four in five Canadians are, in some way, concerned about an oncoming recession and this is more heavily concentrated among older Canadians. Some experts are of the opinion that the risk of a recession over the upcoming four quarters are low.

Nonetheless, these gold stocks have gained this year, in a bearish market and amid high inflation. They are Canadian gold stocks that make for an interesting watch.

Also read: FFN, DF, DGS, LCS & FTN: 5 top TSX dividend stocks under $10

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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