Best Gold Stocks to Diversify Your Portfolio in 2024

Best Gold Stocks to Diversify Your Portfolio in 2024

Gold, a time-honored investment asset, has its fair share of proponents and detractors. Although opinions on its worth differ, it’s widely recognized that gold serves a distinctive purpose in financial markets to preserve value. While the efficacy of gold as an inflation hedge remains a point of contention, gold stocks are valuable components of diversified investment portfolios.

These stocks provide individual investors with an accessible and cost-efficient avenue to participate in the gold market since owning physical gold can be intricate and costly. We have curated a selection of high-performing gold stocks with solid fundamentals and favorable valuations, serving as a valuable resource for investors looking to incorporate gold into their portfolios.

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5 Best Gold Stocks of 2024

Torex Gold Resources Inc (TXG.TO)

Torex Gold is a Canadian company that primarily operates in Mexico. It trades its shares on the Toronto Stock Exchange and the over-the-counter market (OTC) in the U.S. under the symbol TORXF.

Over the past ten years, this stock has experienced significant fluctuations, ranging from approximately $8 to a high of $35. Currently, it stands at around $18.

Among all the stocks on this list, Torex has been projected to have the highest five-year EPS growth rate. Although its earnings can be inconsistent, overall EPS has been trending upward since 2018. Since 2016, sales have also shown consistent growth (with allowance for up to a 10% decrease in any year if followed by an increase in subsequent years).

With a forward P/E ratio of 19.5, this stock’s valuation is reflective of its position within its trading range. Over the last five years alone, P/E values for Torex have ranged between three and over one hundred, quite an extensive range indeed! The company boasts a high solvency ratio which indicates that it generates sufficient cash flow to cover all outstanding debts.

Unlike many other companies in the gold industry that continuously issue additional shares for cash purposes, diluting existing shareholders’ stakes. Torex has not increased its outstanding shares over recent years. This move is highly favorable as it shows management’s commitment to preserving shareholder value.

>> Consider Torex Gold >>

Dundee Precious Metals Inc. (DPM.TO)

Dundee Precious Metals is a mining company based in Toronto, Canada. Its stock is listed on the Toronto Stock Exchange and can be traded over the counter in the United States using the symbol DPMLF.

After Torex, DPM has the second-highest estimated growth rate for earnings per share (EPS) among all listed companies. Since 2016, sales have been consistently increasing every year, although there was a slight dip in 2022. Similar to most gold miners, earnings can be unpredictable and fluctuate between positive and negative values. However, Dundee Precious Metals has achieved three consecutive years of positive EPS.

Between 2018 and 2020, the stock experienced an upward trend before experiencing a decline throughout much of 2021 and early 2022. However, it has been performing well in terms of price appreciation since then. Investors who hold shares of Dundee Precious Metals may receive a dividend yield of approximately 2.3%. Notably, this dividend payout has been increasing each year since 2020.

The forward price-to-earnings ratio (P/E) for DPM currently stands at around 10.0, which falls within the lower end when compared to its five-year range wherein P/E values have varied between four and fifty (a P/E above forty historically shows that it may not be an optimal time to purchase shares).

Over recent years, there has been an increase in outstanding shares for Dundee Precious Metals, which isn’t necessarily ideal unless accompanied by steady or growing EPS figures.

>> Consider Dundee Precious Metals >>

AngloGold Ashanti Limited (AU)

AngloGold Ashanti, headquartered in Johannesburg, South Africa, operates gold mines across Africa, Australia, and the Americas.

Although AngloGold’s earnings forecast is more conservative than other companies mentioned above, it boasts a stronger track record of increasing EPS. Since 2015, the company has consistently reported positive EPS while experiencing overall sales growth since 2018 (with a slight dip in 2021 compared to 2020).

AU’s share price has remained relatively stable over the past ten years. However, it stands out among its peers as one of the few gold stocks currently trading above its 200-day moving average. After a significant rally towards the end of 2022, the stock has experienced some pullback in 2023.

AngloGold offers a dividend yield of approximately 2.4%, but be aware that the dividend amount can vary significantly from year to year.

Currently sitting at a P/E ratio of 28.7, AngloGold’s stock is considered moderately priced. Over the last five years alone, P/E values have ranged from as low as six to well over four hundred for this company.

>> Consider AngloGold Ashanti >>

DRDGold Limited (DRD)

DRDGold, a company based in South Africa, specializes in the extraction and processing of gold from two properties within the country. With consistent sales growth since 2015, the company has encountered only minor setbacks along the way. Over the past four years, its earnings per share (EPS) have remained positive, showing an overall increase, although slightly lower in 2022 compared to 2021.

Following a remarkable rally of nearly 900% between mid-2019 and mid-2020, DRDGold has experienced a gradual decline. Currently offering a dividend yield of approximately 3.0%, the actual dividend amount varies annually.

At present, DRDGold boasts an attractive price-to-earnings (P/E) ratio of 11.2 – one of its lowest readings in five years.

>> Consider DRDGold Limited >>

Royal Gold, Inc. (RGLD)

Royal Gold, a gold streaming company based in Denver, takes a different approach to obtaining gold. Instead of mining it themselves, they purchase the metal from miners through contracts. Similar to FNV, another gold streaming company mentioned in the list, Royal Gold has experienced a consistent increase in share price. While it has the lowest expected annual forward earnings estimate on the list, Royal Gold has proven to be a reliable performer for over ten years.

Over the past nine years, sales have shown steady growth, and EPS has been on an upward trend since 2015, with the exception of 2018, when EPS turned negative.

Since mid-2020 until now, Royal Gold’s stock price has largely remained within a range of $84.54 to $147.70 without significant movement toward either extreme.

>> Consider Royal Gold >>

Best Gold Stocks – Buyer’s Guide

What Are Gold Stocks?

Publicly traded companies involved in the extraction, processing, financing, and trading of gold are known as gold stocks. The top-performing gold stocks on our list are primarily focused on either mining or streaming operations.

Mining refers to extracting gold ore from the earth and transforming it into bullion. Streaming involves providing upfront financial help to gold miners for future opportunities to purchase finished bullion at a discounted price.

While the share prices of gold stocks do not directly mirror daily fluctuations in commodity markets, their revenue streams are closely tied to changes in the price of gold. Investors who hold these stocks aim to capitalize on shifts in gold prices without having to physically own or store physical quantities of the precious metal themselves.

Risks of Gold Stocks

  • The value of gold typically moves in an opposite direction to the strength of the U.S. dollar, meaning that a robust dollar could negatively impact your investment
  • Gold is a highly fluctuating commodity, causing gold prices, as well as the earnings of gold companies, to be unpredictable
  • Gold mining companies frequently operate in politically uncertain regions, potentially jeopardizing your investment

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Advantages of Gold Stocks

Investing in stocks related to gold offers the opportunity to benefit from changes in the value of gold without needing to possess or oversee physical gold. The prices of these stocks experience less fluctuation compared to the actual price of gold, making them a relatively stable investment choice. 

These stocks can act as a potential safeguard against inflation, which further increases their attractiveness for investors seeking ways to protect their portfolios during times of rising prices.

How to Buy Gold Stocks

Investors can acquire gold stocks similarly to any other stock for their investment portfolio. To begin, conduct thorough research on gold companies and determine the amount of money you plan on investing in gold stocks. Once your due diligence is complete, log into your brokerage account.

Within your brokerage account, select the specific stock you wish to purchase, specify the desired purchase price, and show how many shares of that stock you would like to own. Once these decisions have been made, proceed with purchasing the chosen stock. It’ll then become part of your investment portfolio.

However, it’s wise to consult with a financial advisor before making any final decisions regarding investments like these.

Which Is Better: Owning Gold or Gold Stocks?

Deciding between investing in physical gold or gold stocks ultimately depends on your personal objectives and needs.

If you can store physical assets and prefer owning something tangible, then purchasing physical gold may be the more suitable option. However, if your goal is solely to capitalize on fluctuations in the price of gold, then investing in gold stocks might be a better choice.

Both physical gold and gold stocks come with their own sets of pros and cons. Seek guidance from a financial advisor before finalizing any investment decisions.

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Top 3 Gold Investment Companies

Take a look at some of the best Gold IRA companies on the market right now:

Goldco – Best Gold IRA Company Overall

Goldco, a privately owned company based in California, boasts over ten years of experience in the field of precious metals. Their expertise lies in gold IRA and asset protection. They provide services for individuals looking to start or transfer their gold IRAs and assist with tax-advantaged retirement plans.

While Goldco itself does not impose any charges, there are certain fees that customers must know. These include custodian fees, setup fees, annual maintenance fees, and storage fees ranging from $150 to $200 per year. To open a gold IRA account with Goldco, customers are required to make an initial investment of at least $25,000 and go through an account opening process guided by a representative.

The positive feedback received from many satisfied customers speaks volumes about Goldco’s excellent communication skills, efficiency in handling requests or inquiries, specialized knowledge in their field, and outstanding customer service. With a 4.8 out of 5-star rating on average from these cheerful reviews

However, the company has taken steps towards addressing some concerns raised by certain individuals, which include high markups on products offered, and misleading information being provided, causing confusion among clients and leading to delayed payouts for some transactions made by them. Customer support is available Monday through Friday between 7:00 a.m. and 4:00 p.m. PST via phone or online chatbot accessible to their website during these hours.

Read more in the in-depth Goldco review.

>> Invest in Gold With Goldco >>

American Hartford Gold – Best Gold IRA Company for Small Investments

American Hartford Gold Group, headquartered in Los Angeles, is a well-established retailer renowned for its focus on precious metals IRAs. They offer a diverse array of investment plans and purchase choices, encompassing physical gold, silver, platinum, and palladium. Leveraging their proficiency in asset preservation and market insights, American Hartford Gold Group has garnered the confidence of many households.

Their user-friendly website layout and competitive pricing render them a compelling option for investors with an interest in precious metals. Find more information in our American Hartford Gold review.

>> Invest in Gold With American Hartford Gold >>

Augusta Precious Metals – Best Gold IRA Company for Customer Support

Augusta Precious Metals

Founded in 2012 by CEO Isaac Nuriani, Augusta Precious Metals provides silver and gold coins and bars for IRA investments. They assure customers that their metals are of exceptional purity, except for the American Gold Eagle coin. 

The pricing structure is conveniently accessible online and is calculated by adding a margin to the base price, which can fluctuate depending on factors such as supply, demand, and economic circumstances. Augusta actively encourages investors to compare their prices with those other dealers offer. They offer new investors a seven-day window within which they can reverse transactions if necessary.

>> Invest in Gold With Augusta Precious Metals >>

Best Gold Stocks – FAQs

Are Gold Stocks a Good Investment?

Gold stocks, like any other investment, come with their own set of pros and cons. Before deciding to purchase gold stocks, investors should conduct thorough research and seek advice from a financial advisor.

When Should You Buy Gold Stocks?

The aim of acquiring any shares is to purchase at a lower price and sell at a higher price. Accurately predicting market timing can prove challenging. Conduct thorough research, seek guidance from a financial advisor, and determine the most opportune moment for investing in gold stocks.

What Is the Best Gold Stock to Buy?

Determining the optimal gold stock is contingent upon your specific investment objectives. Forbes Advisor has compiled a list of what we consider to be the top gold stocks to possess at present. Each investor should assess their investment strategy and tolerance for risk before selecting the most suitable gold stock for their needs.

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Disclaimer: The authors of this post may be paid to recommend Goldco. The content on this website, including any positive reviews of Goldco may not be neutral or independent.

Individual retirement accounts are tax-advantaged accounts that help individuals save for retirement.

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