2 Top Gold Stocks to Buy as Volatility Increases
Written by Daniel Da Costa at The Motley Fool Canada
Anytime risk and uncertainty in markets heat up, investors look to lower-risk assets to help protect their capital. Therefore, in the current market environment, you may want to consider finding a top gold stock to buy for your portfolio.
Gold has long been one of the safest assets you can buy, and already in recent weeks, the price of the precious metal has been surging. This week, gold hit an 18-month high and could continue to gain in price over the coming weeks.
So if you’re looking for a top gold stock to buy, here are two of the best.
A massive gold producer with global operations
Anytime you’re looking to buy a top gold stock for your portfolio, one of the best to consider is Barrick Gold (TSX:ABX)(NYSE:GOLD), the massive global gold operator.
Barrick is well known by many as one of the largest and most dominant gold producers, which also produces a significant amount of copper.
Owning a massive company like Barrick has some considerable advantages. Because it has more mines and more operations around the world, it has more diversification. So if one mine is yielding less gold than expected, or costs are increasing, Barrick can rely on ramping up production at its other mines.
Even during the initial stages of the pandemic, when Warren Buffett was looking to gain exposure to gold stocks, Barrick was the stock his company chose to invest in.
So with the stock trading at a forward enterprise value-to-EBITDA ratio of just 7.9 times, it’s still cheap. Plus, in just the last month, the stock has gained almost 20%, as investors continue to look for safe-haven assets.
So if you’re looking to buy a top gold stock that can help offset the increasing volatility, Barrick is one of the best to consider.
A top low-cost gold stock to buy now
In addition to Barrick, a lesser-known gold stock, but one with even better fundamentals is B2Gold (TSX:BTO)(NYSEMKT:BTG).
B2Gold is one of the top gold stocks to buy because it’s such a low-cost producer that it’s a stock that you can plan to own for years.
A lot of investors don’t commit to gold stocks for long periods of time because they can fall out of favour during periods of low risk, and for years these stocks didn’t generate much income for investors.
However, B2Gold’s low-cost nature means that the company is consistently earning tonnes of free cash flow. This allows it to pay one of the best dividends in the industry, currently yielding just south of 4%. In addition, B2Gold stock is also significantly cheaper than Barrick and many of its other peers, which is why it’s one of the top gold stocks to buy in this environment.
Even after its recent rally, B2Gold still trades at a forward enterprise value-to-EBITDA ratio of just 3.4 times. That’s considerably cheaper than Barrick.
So if you’re looking for a top gold stock to buy in this environment, B2Gold is one of the best to buy now, and you can also plan to hold it for years.
The post 2 Top Gold Stocks to Buy as Volatility Increases appeared first on The Motley Fool Canada.
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Fool contributor Daniel Da Costa owns B2GOLD CORP. The Motley Fool recommends B2Gold.
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