24/7 Wall St. Insights

• Some top Wall Street strategists feel the AI tech rally is overextended.
• Dividend-paying gold stock can be the perfect portfolio hedge for worried investors.
• Also: 2 Dividend Legends to Hold Forever

There has always been a degree of scorn from Wall Street and so-called investment professionals for those who invested in gold. Laughed at as “Gold Bugs,” the argument against the precious metal, even though gold is one of the most significant financial assets in the world and central banks have been loading up on the commodity, is that it’s not typically a tradeable investment. Warren Buffett owns zero and has previously said it is an investment with “no utility.”

The case for gold and gold miners is compelling for two reasons. Firstly, gold can serve as a strategic hedge against inflation. Secondly, some top miners extract silver and other essential commodities in industrial applications. Spot gold has exploded to all-time highs above the levels hit in the summer of 2020. From a technical perspective, the gold market shows signs of a potentially massive breakout, significantly higher, especially if the fighting in the Middle East expands.

While on an inflation-adjusted basis, the highs that gold hit in the 1980s are still the benchmark for the commodity, many on Wall Street feel the current trend for gold could push the price well above the $2,500 level, versus the recent spot price of $2,465.

We screened our 24/7 Wall Street commodity database, looking for the top mining companies that pay dependable (sometimes big) dividends. Five top stocks make the cut, all rated Buy at top Wall Street firms. Dividend investors should also check out this free report on dividend legends.

Agnico Eagle Mines

This top stock is one of Wall Street’s most preferred North American gold producers and offers a reassuring 2.62% dividend. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold mining company that has consistently produced precious metals since 1957.

Its eight mines are strategically located in Canada, Finland, and Mexico, with exploration and development activities spanning the United States and Sweden.

The company and its shareholders are wholly exposed to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.

The stock is breaking through highs set in 2010 and 2020, and it looks like it could rocket even higher.

Barrick Gold

This stock is another top contender in the sector and presents a promising entry point and a 2.47% dividend. Barrick Gold Corp. (NYSE: GOLD) and Randgold Resources completed their merger on Jan. 1, 2019, propelling them to the forefront as the world’s largest gold company in terms of production, reserves, and market capitalization.

The company holds a:

• 50% interest in the Veladero mine located in the San Juan Province of Argentina
• 50% interest in the KCGM, a gold mine located in Australia
• 95% interest in Porgera, a gold mine located in Papua New Guinea
• 50% interest in the Zalda­var, a copper mine located in Chile
• 50% interest in the Jabal Sayid, a copper mine located in Saudi Arabia

Barrick also owns gold mines and exploration properties in Africa and gold projects in South America and North America. It has a strategic cooperation agreement with Shandong Gold Group Co. Ltd.

B2Gold

For those seeking high returns, this small-cap gold stock offers an exciting opportunity for sector exposure and a rich 5.39% dividend. B2Gold Corp. (NYSE: BTG) is a dynamic gold producer with three mines operating in Mali, the Philippines, and Namibia.

It also operates the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia.

The company also has a 25% interest in Calibre Mining Corp. and approximately 19% interest in BeMetals Corp.

In addition, it has a portfolio of other evaluation and exploration assets in Mali, Uzbekistan, and Finland.

DRDGold

While off-the-radar, this is another small-cap mining gem that pays a strong 4.60% dividend. DRDGold Ltd. (NYSE: DRD) is a gold mining company that engages in the surface gold tailings retreatment business in South Africa.

It also involved exploration, extraction, processing, and smelting activities.

The company recovers gold from surface tailings in the Witwatersrand basin in Gauteng province. DRDGold was formerly known as Durban Roodepoort Deep and changed its name in 2004.

Newmont

Gold miner Newmont Corp. (NYSE: NEM) operates through the following geographical segments:

• North America
• South America
• Nevada
• Australia
• Africa

The North American segment consists primarily of:

• Carlin, phoenix, Twin Creeks, and Long Canyon in the state of Nevada
• Cripple Creek and Victor in the state of Colorado

The South American segment consists primarily of Yanacocha in Peru and Merian in Suriname.

The Australia segment consists mainly of Australia’s Boddington, Tanami, and Kalgoorlie.

The Africa segment consists primarily of Ahafo and Akyem in Ghana.

Proper asset allocation should always include at least a single-digit percentage holding of precious metals like gold and silver. Not only do they hedge inflation, which could be huge now and over the long term, but they can really help if the market does go into correction or bear market mode, as they tend to trade inversely to markets trading down.

The SPDR Gold Shares ETF (NYSE: GLD) is one of the best pure plays on gold for investors. The trust that sponsors the fund holds physical gold bullion and some cash. Each share represents one-tenth of an ounce of the price of gold. It should be noted that the fund does not pay a dividend.

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