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Highlights
- Some investors feel that investing in precious metal stocks is a healthy way to diversify their portfolio risk.
- A precious metal stock mentioned here marked a year-to-date (YTD) growth of more than 10 per cent.
- A company listed below posted a return on equity (ROE) of 16.07 per cent.
Some investors feel that investing in precious metal stocks is a healthy way to diversify their portfolio risk.
Many of the precious metal stocks in Canada are presently undervalued as compared to their actual value, which could help investors earn notable returns in the future.
That said, let us have a closer look at two precious metal stocks listed on the Toronto Stock Exchange (TSX).
Also read: Top 5 Canadian gold stocks to buy at low prices & hold long term
Kirkland Lake Gold Ltd (TSX: KL)
Canadian gold miner Kirkland Lake Gold saw its stock close at C$ 52.12 apiece, down by 0.096 per cent, at market close on Monday, November 1. At this level, it had declined by more than 20 per cent from its 52-week high of C$ 65.37 reached on November 6, 2020.
However, the gold stock marked a nine-month gain of more than three per cent. It was also up by nearly 10 per cent in the previous six months and expanded by roughly one per cent in the last month.
On the valuation front, Kirkland held a price-to-earnings (P/E) ratio of 13.7 and a return on equity (ROE) of 16.07 per cent (as of Tuesday, November 2).
Franco-Nevada Corporation (TSX: FNV)
Stock of Franco-Nevada Corporation, a Canadian mining firm focused on precious metals royalty and investment, saw its stock wrap trade at C$ 176.32 apiece, down by 0.153 per cent, on November 1.
At this level, it had slumped by about 14 per cent from its one-year high of C$ 205.25 hit on August 4, 2021.
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FNV stock, however, marked a year-to-date (YTD) growth of more than 10 per cent. It also surged by almost 12 per cent in the last nine months and rose by more than seven per cent on a quarter-to-date (QTD) basis. Its one-month return, on the other hand, stood at more than nine per cent.
The C$ 33.69-billion market cap precious metal royalty holder noted a P/E ratio of 39.5 and an ROE of 11.93 per cent (as of November 2).
Also read: 5 Canadian gold stocks to buy
Bottom line
While precious metals are often viewed as safe havens in terms of investment, changing market scenarios can push any stock into volatile territories. Hence, investors should carefully invest their money to ensure profits and avoid losses.
A company’s business, assets and projects, expansion programs, production and revenue details are some of the essential factors to consider before investing in stocks.
