Investors are always looking for ways to navigate market volatility, especially as the global economic outlook remains uncertain. One approach to counter market fluctuations is to seek out the best mining stocks to buy.
Mining companies are generally less vulnerable to economic instability as they provide the raw materials essential to various industries such as construction, technology, and manufacturing.
As such, mining stocks can offer stability and growth potential to investors’ portfolios. This article will explore three mining stocks to buy that are poised to perform well in 2023 and beyond, despite market volatility.
These stocks have shown robust returns relative to a rather volatile market of late. Thus, for those seeking to add defensiveness, these are three great options to consider.
Let’s dive in.
Barrick Gold (GOLD)
Including Barrick Gold (NYSE:GOLD) in a mining portfolio is essential. Under the leadership of CEO Mark Bristow, the company has thrived in recent years due to its effective management.
The Canadian company has established a significant market presence with 13 gold and copper mining operations across regions from Nevada to sub-Saharan Africa. As the world’s second-largest gold mining company, Barrick has solidified its position as a dominant force in specific regional markets.
The collaboration between Barrick and Newmont through their joint venture in Nevada Gold Mines is considered a transformative opportunity that could yield significant returns for both companies. Barrick has already established a strong market presence, evidenced by its impressive gross profit margin of 39%.
Barrick is expected to achieve a net income of $1.6 billion this year, based on its $11.5 billion revenue. The company’s profits have increased annually by 15%, making it one of the mining stocks to buy with a solid runway.
Over the past few years, investors in Freeport-McMoran (NYSE:FCX), have experienced a turbulent journey. Following a misguided venture into the oil and gas industry, the company has returned its attention to its primary focus.
Freeport-McMoRan is recognized as the biggest copper producer that is publicly traded globally and has also made a noteworthy contribution in producing gold and molybdenum.
Although inherent risks are associated with investing in copper, investors who have taken that chance have seen a substantial return. Despite a challenging market, Freeport-McMoRan’s exceptional performance in the past year has set it apart from other listed stocks.
Freeport-McMoRan is now rated as a Zacks Rank #2 (Buy), which investors may consider a favorable bet. This rating upgrade is due to the upward trajectory of earnings estimates, which is one of the most influential factors impacting stock prices.
I like the diversification Freeport’s operations provide. Thus, for those looking for a more well-rounded mining stock, this is a top option in my books.
Agnico Eagle (AEM)
Agnico Eagle (NYSE:AEM) has maintained a track record of consistently surpassing the performance of gold and gold equities since 1998, achieving a compound annual growth rate of about +13%.
Agnico Eagle Mines is headquartered in Toronto, Canada, and operates as a gold producer in Mexico, Finland, and Canada, with exploration and development activities in the United States. Compared to other gold stocks, Agnico Eagle has a higher risk profile. Since the beginning of January, AEM’s equity value has dropped by nearly 2%.
Despite this, Agnico Eagle Mines gained 6.5% in the past year, which has increased optimism among potential investors. According to Gurufocus.com, AEM is currently valued fairly as a business. Although the company’s premium to earnings may be high, objectively speaking, its three-year growth rate of 16.6% is better than 73.42% of its competitors. Agnico’s net margin is also impressive, at 10.36%, which is better than almost 69% of its peers.
Looking at the opinions of financial analysts, they consider AEM to be a “strong buy” based on consensus. Additionally, their projected price target for AEM is $63.23, indicating a potential increase of 20%. As a result, investing in AEM would be a wise decision for those interested in purchasing gold stocks to protect against inflation.
On the date of publication, Chris MacDonald has a position in AEM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Industrial, Precious Metals