RIO to NEM: Should you consider these 5 gold stocks amid inflation?

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RIO to NEM: Should you consider these 5 gold stocks amid inflation?

RIO to NEM: Should you consider these 5 gold stocks amid inflation?
Image source: © Milslav78 | Megapixl.com
Highlights:
  • Rio Tinto Plc (NYSE: RIO) has a dividend yield of 10.97% and an annualized dividend of US$8.33.
  • Freeport-McMoRan, Inc. (NYSE: FCX) stock’s P/E ratio is 12.32, and the forward P/E for one year is 11.10. 
  • Franco-Nevada Corporation (NYSE: FNV) revenue increased 9.7% YoY to US$338.8 million for the first quarter ended March 31, 2022. Its dividend yield is 0.89%.

Gold futures trading started on a low note on Wednesday but steadily picked up steam as the day progressed. Gold is considered a safe-haven asset during market turmoil.  

However, the yellow metal can be sensitive to a higher interest rate environment since it can make the bullion less attractive than higher-yielding assets.  

The labor department is expected to release its May CPI data on Friday, June 10. The data can have a bearing on these stocks. Gold may earn some traction if inflation rises.  

Here we discuss five gold stocks that saw significant growth in recent months. 

Rio Tinto Plc (NYSE: RIO)

Closing price on June 7, 2022: US$78.4
Market capitalization: US$124.4 billion

London-based Rio Tinto extracts a variety of minerals worldwide. These include iron ore, aluminum, gold, diamond, copper, and industrial minerals. 

The company reported consolidated sales revenue of US$63.5 billion for the fiscal year ended December 31, 2021, compared to US$44.6 billion in the previous fiscal. Its net earnings attributable to owners of Rio Tinto were US$21.09 billion versus US$9.77 billion a year ago. 

Rio had US$15.2 billion in cash, cash equivalents and other short-term cash investments as of December 31, 2021, compared to US$12.9 billion as of December 31, 2020.

The stock traded in the range of US$89.51 to US$59.58 in the last 52 weeks. It has a forward P/E for one year of 6.82. The dividend yield is 10.97%, and the annualized dividend is US$8.33.

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Freeport-McMoRan, Inc. (NYSE: FCX)

Closing price on June 7, 2022: US$43.39
Market capitalization: US$61.6 billion

Phoenix, Arizona-based Freeport-McMoRan is a mining company operating in Asia, North America, and South America. It explores copper, gold, and molybdenum.

The company posted a net income of US$1.9 billion on revenue of US$6.6 billion for the quarter ended March 31, 2022. For the same quarter in 2021, the net income and revenue were US$0.953 billion and US$4.85 billion, respectively. Its earnings per share diluted came in at US$1.04 in the March quarter versus US$0.48 in the same period the previous year. 

The stock traded in the range of US$51.99 to US$30.02 in the last 52 weeks. 

It has a P/E ratio of 12.32 and a forward P/E for one year of 11.10. Its current dividend yield is 0.7%, and the annualized dividend is US$0.30.

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Franco-Nevada Corporation (NYSE: FNV)

Closing price on June 7, 2022: US$146.28
Market capitalization: US$27.77 billion

Franco-Nevada is a royalty and investment company focused on precious metals. Its diversified portfolio comprises precious metals and royalty streams. Most of FNV’s revenue comes from gold, silver, and platinum. It is headquartered in Toronto, Ontario. 

It was ranked the top gold company by Sustainalytics. It also earned an AA rating from MSCI. For the first quarter ended March 31, 2022, it earned US$338.8 million in revenue, a 9.7% increase YoY. This growth was backed by higher realized oil and gas prices.

Its net income came in at US$182 million compared to US$171.5 million in the March quarter of 2021. The adjusted net income per share was US$0.93 and US$0.84 for the March quarter of 2022 and 2021, respectively. 

The stock traded in the range of US$169.32 to US$124.95 in the last 52 weeks. It has a P/E ratio of 37.18 and a forward P/E for one year of 39.43. The dividend yield is 0.89%, and the annualized dividend amounted to US$1.28.

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Newmont Corporation (NYSE: NEM)

Closing price on June 7, 2022: US$68.38
Market capitalization: US$53.56 billion

Newmont Corp is a gold producer with operations in the US, Canada, South America, Australia, and Ghana. The Denver, Colorado-based company also produces silver, copper, lead, and zinc. 

For the three months ended March 31, 2022, its sales were US$3.02 billion compared to US$2.87 billion in the same quarter a year ago.

The net income of the company came in at US$448 million or US$0.56 per share diluted compared to US$559 million or US$0.70 per share diluted for the March quarter of 2021.

The stock traded in the range of US$86.37 to US$52.60 in the last 52 weeks. It has a P/E ratio of 51.52 and a forward P/E for one year of 19.94. The dividend yield is 3.24%, and the annualized dividend amounted to US$2.20.

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RIO to NEM: Should you consider these 5 gold stocks amid inflation?© Theohudayanto | Megapixl.com

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Barrick Gold Corporation (NYSE: GOLD)

Closing price on June 7, 2022: US$
Market capitalization: US$37.08 billion

Barrick Gold Corp is one of the largest gold producers in the world. It runs nine gold mines across continents.

For the quarter ended March 31, 2022, its revenue was US$2.85 billion compared to US$3.31 billion in the prior year. The net income was US$438 million or US$0.25 per share diluted compared to US$726 million or US$0.41 per share diluted in the March quarter of 2021.

The stock traded in the range of US$26.07 to US$17.27 in the last 52 weeks. It has a P/E ratio of 19.12 and a forward P/E for one year of 17.28. The dividend yield is 1.95%, and the annualized dividend amounted to US$0.40.

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Bottom line:

The gains in these stocks contrast the S&P 500 Index’s 13.63% decline year-to-date. However, as an investor, one must analyze the micro and macro factors before investing in stocks. 

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