The Motley Fool

New to investing? 3 gold stocks to consider

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Gold bullion on a chart
Image source: Getty Images.

More and more young people are investing their money, rather than letting inflation erode the value of their savings. Yesterday the Royal Mint released a statement on the burgeoning interest in buying gold amongst young investors. Historically, gold is one of the safest investments, and seen as a worthwhile hedge against inflation. Moreover, the price of gold is near record highs because of fears of the pandemic’s effect on the global economy. Rather than buying physical gold, I prefer to invest in gold stocks. These carry more risk, but if the miners do well, the rewards can be far higher. 

The safest bet

Barrick Gold (NYSE: GOLD) is one of the largest gold miners in the world. It owns a majority share of the Nevada Gold Mines, the largest gold-producing mine in the world. The miner has completely cleared its $13bn of debt since 2013 and has assets of $5.2bn in cash and a $3bn line of credit. The miner has even recommended $750m of surplus cash be returned to shareholders this year. In addition it pays out a small dividend of 1.7%.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Its share price is now at $20.90, down from a high of $29.75 in September 2020. During the market crash in March last year, Barrick was one of the least affected stocks. 

The main risk to Barrick’s share price is a strong global post-pandemic economic recovery. This miner seems too big to fail, but if worldwide economies improve and inflation risks subside, investors may pull money from gold stocks into more lucrative options. 

More adventurous gold stock

Centamin (LSE: CEY) has experienced a volatile couple of years. In April 2019, the share price was at 80p; in August 2020, it was at 220p. It is currently at 104p. The company operates the Sukari gold mine in Egypt, and expects to generate over 400,000 ounces of gold this year. Centamin is promising a 6.1% dividend return this year, with a dividend policy that heavily favours investors. It has no debt, and $331m in liquid assets that will help it to cope with fluctuations in the gold spot price. It also has big plans to expand African mining operations over the next few years.

The main concerns are the share price volatility, political instability in Egypt, and the risks associated with the development of new mining assets. 

Hope to strike gold

Scotgold Resources (LSE: SGZ) could be a potential goldmine, but comes with significant risk. Its share price fell from a high of 151p in October last year to just 61p today, a reduction of almost two thirds. Buying in at this price point could be attractive.

I think the success of the company depends on the Cononish gold mine in Scotland. CEO Phil Day recently stated that “the potential is huge – that there is gold everywhere.” The company aims to mine 10,000 ounces of gold this year, and more than double production in 2022. It is planning to expand operations across central Scotland over the next decade. I would only invest a small amount as this is a highly speculative stock that depends on the success of one risky mining operation. However, early investors could make big returns on this gold stock if the mine succeeds.

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Charles Archer has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.