7 Gold Stocks to Buy as the Fear Trade Kicks into High Gear

Stocks to buy

Gold stocks to buy benefit from both a near term and long-term approach. In the immediate framework, the yellow metal has been a stout performer. Further, recent developments, such as a strong jobs report in March continue to fan the flames of inflation.

Looking over the horizon, gold stocks to buy may benefit from the fear trade. After all, investors have much to be worried about. From geopolitical flashpoints extending across multiple regions in the world to broader global economic uncertainties, there are many questions that remain unanswered. In such situations, precious metals have long served as safe-haven assets.

Now, buying physical bullion can be cumbersome, especially because investors must also store it somewhere. On the other hand, gold stocks to buy are super convenient and can indirectly rise on the price of the asset itself. With that, here are some compelling ideas to consider.

BHP (BHP)

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Let’s start off this list of gold stocks to buy with a diverse play in the basic materials segment, BHP (NYSE:BHP). Operating as a resource enterprise, the company focuses on extracting multiple odditiesties, not just gold. In particular, it puts the spotlight on copper, zinc and iron ore, in addition to the precious metals. Notably, it also mines uranium, making BHP an indirect energy play.

Since it’s difficult to predict which way the wind will blow, BHP’s diverse product portfolio should help soothe jitters. Obviously, with the gold price rising, BHP stock may be able to ride the market’s coattails. Further, fear-trade dynamics may undergird positive sentiment.

On another front, The Washington Post came out with an article recently that the U.S. is running out of power. With data centers consuming a greater share of electricity, the major utilities can’t keep up. That’s likely going to put uranium in the discussion.

So, it’s not the most direct play for precious metals. Yet the broad relevancies make BHP one of the gold stocks to buy.

Barrick Gold (GOLD)

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A sector-specific idea within the basic materials segment, Barrick Gold (NYSE:GOLD) engages in the exploration, mine development, production and sale of gold and copper properties in Canada and internationally. It also explores and sells silver and energy materials. That’s important because the silver market has also shot higher alongside the yellow metal.

Financially, Barrick is impressive. Last fiscal year, it beat all of its quarterly bottom-line targets. It did so with a wide margin. On average, the positive earnings surprise clocked in at 20.38%. Its best performance came during the fourth quarter, with Barrick posting earnings per share of 27 cents against a forecast calling for 21 cents.

For the current fiscal year, experts believe EPS will reach 94 cents on revenue of $12.27 billion. Last year, the print was 84 cents EPS on sales of $11.4 billion. For fiscal 2025, they project revenue to rise to $13.49 billion.

Given the current global situation, this forecast may be understated. Either way, it’s one of the gold stocks to buy.

Newmont (NEM)

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A top-tier idea among gold stocks to buy, Newmont (NYSE:NEM) engages in the production and exploration of gold. It also explores other resources, such as copper, silver and zinc. Per its public profile, Newmont features operations and assets across the globe, including the U.S., Canada, Peru and Australia.

However, the underperformance of NEM up until recently may give contrarian investors an upside opportunity. Yes, shares are down 3% since the beginning of the year. However, in the trailing week, they popped up almost 8%. And in the past one-month period, NEM returned stakeholders more than 12% of equity value.

Looking at the current fiscal year, by the end of the period, experts believe EPS will land at $2.68. That’s up significantly from last year’s print of $2.19. Also, revenue could soar to $22.05 billion. If so, we’re talking about a year-over-year growth rate of 37.2%.

Newmont also provides a forward annual dividend yield of 2.52%. So, the combination of capital gains potential along with the yield makes NEM one of the gold stocks to buy.

Wheaton Precious Metals (WPM)

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Another popular name among gold stocks to buy, Wheaton Precious Metals (NYSE:WPM) is a streaming enterprise. Rather than extracting resources itself, Wheaton contracts with mining companies, providing upfront capital. In exchange, the miners agree to sell part or all of the metals produced at a predetermined discounted price. For WPM stakeholders, this business arrangement provides pricing stability.

Aside from a bum note in Q1 last year, Wheaton’s earnings performance has been very solid. Overall, the average positive earnings surprise came out to just under 6%. Notably, the Q1 print represented an 8% miss against the expected target. That goes to show the long-term resilience of Wheaton’s streaming business model.

For the current fiscal year, analysts forecast that EPS will land at $1.11. That’s disappointing compared to last year’s print of $1.18. Still, the high-side estimate calls for $1.41. Just as importantly, revenue could reach $1.17 billion, up 15.1% from last year’s tally of $1.02 billion.

While not much, Wheaton also offers a forward yield of 1.22%. It makes a decent case for gold stocks to buy.

Royal Gold (RGLD)

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A similar enterprise to Wheaton Precious Metals, Royal Gold (NASDAQ:RGLD), in addition to its streaming business specializes in royalties. As with the aforementioned business model, Royal Gold provides an upfront payment to individual miners. However, rather than receiving the physical metals, Royal instead receives a percentage of the generated revenue. Again, the advantage to RGLD shareholders is price predictability.

Now, one key difference between RGLD and WPM centers on the discrepancy in financial performances. While Wheaton incurred one miss, Royal Gold suffered two quarterly estimate misses last fiscal year. Further, its Q2 print met the target of 88 cents. It did redeem itself in Q4, however, generating a positive surprise of 23.4%. Overall, the earnings surprise in 2023 came out to 3.85%.

Still, looking to the end of fiscal 2024, analysts believe EPS will hit $4.21. That’s conspicuously above last year’s print of $3.53. Also, revenue could slot in at $697 million or 15.1% above last year’s haul of $605.72 million.

Royal pays a forward yield of 1.28%, making for a nice package among gold stocks to buy.

B2Gold (BTG)

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Moving over to the more speculative side of the field, B2Gold (NYSEAMERICAN:BTG) operates as a gold-producing enterprise. Per its corporate profile, the company operates the Fekola Mine in Mali, the Masbate Mine in the Philippines and the Otjikoto Mine in Namibia. It also features a 100% interest in the Gramalote gold project in Colombia.

Financially, B2Gold is all over the map. In fiscal 2023, its best performance came in Q1, when the company posted EPS of 10 cents. At the time, analysts were looking for earnings of 7 cents per share. Unfortunately, the gold producer lost the plot in the second half. That was when the earnings surprise slipped to 20.55% below parity (against expectations).

Further, fiscal 2024 could be a rough year for BTG. For example, experts at the high end are looking for revenue of $1.82 billion. That’s still off the pace from last year’s haul of $1.93 billion. However, a recovery might take place in fiscal 2025, with sales potentially skyrocketing to $2.41 billion.

Still, the recent market performance indicates the uplift could arrive sooner.

Sibanye Stillwater (SBSW)

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I’m not going to beat around the bush. Sibanye Stillwater (NYSE:SBSW) ranks among the riskiest gold stocks to buy. Based in South Africa, Sibanye theoretically should benefit from the resource-rich region. Moreover, the company produces a wealth of critical resources. In addition to the yellow metal, it focuses on palladium, platinum and rhodium, among other commodities.

However, extracurricular issues have seen SBSW stock lose more than 31% of its equity value over the past 52 weeks. Part of these issues involve labor disputes that can easily disrupt production. Still, in the past five sessions, SBSW stock gained 19%. One long-term catalyst could be the fall of electric vehicles and the rise of hybrids. Hybrid vehicles are combustion-based and therefore require palladium in the integration of catalytic converters.

Another reason to consider SBSW as one of the gold stocks to buy centers on the lack of belief. Because of the underlying company’s credibility issues, it trades at only 9.77X forward earnings. It also features a modest price of 0.56X trailing-year revenue.

And if you need a little coaxing, Sibanye offers a forward dividend yield of 3.92%.

On the date of publication, Josh Enomoto did not have (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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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