Stock Market

Gold continues to push higher, silver is starting to play catch-up, and more investors are beginning to pay attention to gold mining stocks. If you prefer to avoid ETFs, it may be worth considering Agnico Eagle Mines (NYSE:AEM) as a core stock in your portfolio. Agnico is a major player in the global gold mining sector. With a market capitalization of nearly $31 billion, AEM stock is a name to consider.

From a fundamental perspective, this is a strong company. The most recent quarter showed earnings per share beat by over 15%, with year-over-year revenue up 26.89%. This occurred when gold prices were not at all-time highs, so these numbers should continue to trend higher because of the momentum we’re seeing in the yellow metal. In the last earnings report, Agnico noted a 10.5% boost in gold mineral reserves, totaling 53.8 million ounces. I like to see that as gold continues to push higher.

One of the under-appreciated aspects of investing in a gold mining stock like Agnico is you get paid to wait. The current dividend payout ratio stands at 32.9% according to YCharts, indicating efficient reinvestment of profits. And AEM has consistently paid dividends, proving the company’s commitment to shareholder value. This has been true even while gold prices were languishing.

I consider Agnico to be among the blue-chip stocks of the gold miner industry. With eight mines across Canada, Finland, and Mexico, and gold constituting 95% of its revenue, investors can’t overlook AEM’s geographical and gold concentration. AEM stock should be a direct beneficiary as the gold bull market persists. The company also continues to expand, with development projects like the Meliadine and Amaruq mines.

One of the major challenges with investing in gold miners is operational hiccups. Labor disputes, regulatory hurdles, and environmental concerns represent ongoing operational risks, but this is a company that knows how to deal with them.

The Bottom Line on AEM Stock

I’m a fan of betting on companies that survive difficult cycles. It makes those companies leaner and more efficient, allowing them to really shine when the cycle comes their way again. And with forward guidance for 2024 to 2026 showing gold production levels in line with forecasts, institutions likely will put even more faith in the company on a go-forward basis.

I’m quite bullish on gold mining stocks in general and think Agnico is best in class. The company’s adherence to production forecasts, global positioning, and operational strength all line up nicely with gold’s rally. I think AEM stock can be a major winner over the next 12 months.

On the date of publication, Michael Gayed did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The Lead-Lag Report is provided by Lead-Lag Publishing, LLC. All opinions and views mentioned in this report constitute our judgments as of the date of writing and are subject to change at any time. Information within this material is not intended to be used as a primary basis for investment decisions and should also not be construed as advice meeting the particular investment needs of any individual investor. Trading signals produced by the Lead-Lag Report are independent of other services provided by Lead-Lag Publishing, LLC or its affiliates, and positioning of accounts under their management may differ. Please remember that investing involves risk, including loss of principal, and past performance may not be indicative of future results. Lead-Lag Publishing, LLC, its members, officers, directors and employees expressly disclaim all liability in respect to actions taken based on any or all of the information on this writing.

Michael A. Gayed is the Publisher of The Lead-Lag Report, and Portfolio Manager at Tidal Financial Group, an investment management company specializing in ETF-focused research, investment strategies and services designed for financial advisors, RIAs, family offices and investment managers.

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