The Motley Fool

Stock market crash: A dividend stock whose share price I think could surge in August!

You should always look to buy companies with a view to how they’ll likely be performing several years from now. The most successful share investors following the 2020 stock market crash are likely to be those with long-term strategies. Buying shares based on what you’ll think their share prices will do over a short time horizon often spells trouble.

Arrow descending on a graph portraying stock market crash

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

That’s not to say that investors shouldn’t buy shares today in the hope of meaty share price gains. Provided you buy companies with bright long-term futures, and strong balance sheets to help them navigate temporary problems for the global economy, then adding shares to your investment in expectation that they’ll gain value in August remains a good idea. Even if another stock market crash happens next month, companies of true quality should still furnish you with terrific returns over the long run.

Navigating the stock market crash

I’d certainly buy Hochschild Mining (LSE: HOC) shares on hopes of a silver price surge in August. The business hasn’t fallen in value as part of the broader stock market crash. In fact the FTSE 250 miner has gained 18% in value in 2020 thanks to rocketing metal values. And I’m encouraged of more gains by City brokers steadily ramping up their silver price forecasts.

The number crunchers at Jefferies are the latest to upgrade their expectations on strong investment demand. They now expect silver – which just spiked above the $19 per ounce marker – to keep rising to average $19.50 in quarter four. They think it’ll average 20 bucks an ounce in 2021, too.

Buy into this silver star

Buying Hochschild Mining shares is a great way to ride the rocketing silver price. News from the business, which digs for metal all over the Americas, hasn’t been that brilliant of late. Silver production crashed in the first half due to Covid-19-related shutdowns. But the bright silver price has allowed it to avoid sinking amid the broader stock market crash.

Normalising work conditions more recently suggest that the business is over the worst of it. Indeed, I’d buy Hochschild as production at its flagship Inmaculada asset in Peru goes from strength to strength and exploration at the mega mine continues to yield terrific results. I’d also buy because of the bright outlook for silver prices beyond the medium term, first on expectations of strong safe-haven demand and secondly on the likelihood of improving industrial demand as the global economy steadily improves.

Hochschild doesn’t carry the biggest dividend yields out there. These sit at 1% and 1.7% for 2020 and 2021 respectively. But City brokers expect dividends to explode over the medium term as profits improve. And I expect them to keep rocketing as silver prices likely keep on improving. I’d buy this FTSE 250 dividend stock today and hold it for years.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Royston Wild 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

The renowned 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 enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.