In this article, we discuss 10 best Canadian gold stocks to buy now. To skip the detailed analysis on the subject, go directly to 5 Best Canadian Gold Stocks to Buy Right Now.
Gold underperformed the broader market from 2010-2019. However, it saw a significant change in 2020. Despite the pandemic-induced recession, the commodity posted 33% in returns for investors in the year. According to a market report from 2021, the global gold mining market is expected to grow from $214.1 billion in 2021 to $249.6 billion by 2026, at a CAGR of 3.1% for the period. Jewelry as an end-use held the most significant market share at $107.3 billion, which is forecasted to grow to $124.6 billion by 2026.
Canadian Gold Market
In Canada, the production value of gold was approximately $12.3 billion in 2020. With 182 tonnes of gold production in 2020, Canada was ranked as the fifth largest producer of gold. It is the country’s most valuable mined commodity and the production of gold in the country increased by 78% in 2020 from its 2010 levels. 71% of the gold was produced in Quebec and Ontario.
Despite the recent headwinds faced by the gold market, it is considered a safe-haven commodity, which everyone turns to in times of recession. Moreover, even with the current pressures, a few Canadian companies are fighting off the inflationary headwinds and forging ahead. Some of the best Canadian gold stocks include Agnico Eagle Mines Limited (NYSE:AEM), Wheaton Precious Metals Corp. (NYSE:WPM), and Alamos Gold Inc. (NYSE:AGI).
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Our Methodology
We scanned the database of 895 hedge funds tracked by Insider Monkey as of the end of the second quarter and picked 10 most popular Canadian gold stocks. These companies also have long-term catalysts and bullish ratings from market analysts.
Best Canadian Gold Stocks to Buy Right Now
10. Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Holders: 10
Centerra Gold Inc. (NYSE:CGAU) is a Canadian gold and copper-producing company operating in North America, Turkey, and a few other countries.
Centerra Gold Inc. (NYSE:CGAU) is currently one of the best Canadian gold stocks to buy now because of the discounted price it is selling for. After the settlement of the Kumtor mine dispute with the Kyrgyz government and its Q2 results, the stock fell by 20% even though it was trading at fair value. The company’s enterprise value is close to $418 million as of mid-September. To put things into perspective, two of the gold mines owned by Centerra Gold Inc. (NYSE:CGAU) produced $314 million of mine-site FCF. Even though the company suspended production in the Öksüt mine for the rest of the year due to the detection of mercury, there are still over 58,000 ounces of gold from the mine, ready to be processed.
The company has a dividend yield of 5.24% as of September 23 and a payout ratio of 33.96%. The latest quarterly dividend of $0.0538 was paid out on September 8.
On August 15, National Bank analyst Mike Parkin reiterated an Outperform rating on Centerra Gold Inc. (NYSE:CGAU)’s shares and lowered the price target to C$10.50 from C$14.
Agnico Eagle Mines Limited (NYSE:AEM), Wheaton Precious Metals Corp. (NYSE:WPM), and Alamos Gold Inc. (NYSE:AGI) are some of the best Canadian gold stocks along with Centerra Gold Inc. (NYSE:CGAU).
9. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 10
Kinross Gold Corporation (NYSE:KGC) is an Ontario-based gold and silver mining company. The company operates three mines in the US, one in Brazil, and one in Mauritania. Kinross Gold Corporation (NYSE:KGC) has a dividend yield of 3.39% as of September 23 and a payout ratio of 31.73%. The sector average dividend yield and payout ratio stands at 2.82% and 23%, respectively. In addition, Kinross Gold Corporation (NYSE:KGC)’s management announced a share repurchase program of $300 million on September 19.
As of September 21, National Bank analyst Mike Parkin assigned a Buy recommendation to the stock with a price target of C$9, up from C$8.25.
8. Osisko Gold Royalties Ltd (NYSE:OR)
Number of Hedge Fund Holders: 10
Osisko Gold Royalties Ltd (NYSE:OR) is a Montreal-based gold royalty company. Osisko Gold Royalties Ltd (NYSE:OR) is one of the best Canadian gold companies, with a 5% net smelter royalty in the Canadian Malartic Mine. The entirety of the Canadian Malartic Mine was expected to produce 550,000 ounces of gold from 2029-2039. However, the expected production from the Odyssey mine alone is 15.5 million oz. Furthermore, the company’s new stream on the Tintic Project in Utah produces the highest grade gold in the world.
On August 11, TD Securities analyst Greg Barnes and Raymond James analyst Brian MacArthur maintained a Buy and Outperform rating for Osisko Gold Royalties Ltd (NYSE:OR), respectively. Both analysts raised their price targets on the company, with Barnes raising it to C$20 from C$18.50 and MacArthur raising his price target to C$21 from C$20.
7. Sandstorm Gold Ltd. (NYSE:SAND)
Number of Hedge Fund Holders: 12
Sandstorm Gold Ltd. (NYSE:SAND) is a Canada-based gold royalty company. The company acquires royalties and streams for gold and other precious metals. On August 17, BMO Capital analyst Rene Cartier upgraded Sandstorm Gold Ltd. (NYSE:SAND)’s shares to Outperform from Market Perform after resuming coverage. Moreover, the analyst lowered his price target to $9 from $9.50 and mentioned that the company has increased its scale significantly.
Sandstorm Gold Ltd. (NYSE:SAND) has recently made a few notable acquisitions that have made it one of the best Canadian gold stocks. At the end of August, the company announced the reverse takeover transaction of Horizon Copper Corp. for 30% of its interest in Hot Maden for $10 million in cash and a 25% equity stake in Entrée Resources Limited. Horizon Copper is liable to sell Sandstorm Gold Ltd. (NYSE:SAND) 20% of all gold produced from Hod Maden at 50% of the gold spot price until 405,000 ounces of gold are delivered. After that, Horizon will sell 12% of all the gold to the company at 60% of the gold spot price.
The company’s attributable production is expected to increase from 85,000 gold-equivalent ounces in 2022 to 155,000 gold-equivalent ounces in FY2025.
6. Seabridge Gold Inc. (NYSE:SA)
Number of Hedge Fund Holders: 12
Seabridge Gold Inc. (NYSE:SA) acquires and explores gold properties. The company is headquartered in Ontario, Canada.
Seabridge Gold Inc. (NYSE:SA)’s flagship project KSM was acquired by the company in 2000 and is potentially the most significant growth catalyst for the company. With the acquisition of its next-door deposit, Snowfield, the KSM project has made significant leaps as shown in its updated preliminary feasibility study for the KSM project. Compared to the 2016 preliminary feasibility study, proven and probable gold reserves have increased by 22% to 47.3 million ounces due to higher gold grades from the East Mitchell deposit. Moreover, reports show a 90% increase in average annual gold production, 22% in copper, and a whopping 363% increase in yearly molybdenum production. In addition, Seabridge Gold Inc. (NYSE:SA) has bought two other exploration projects, one of which is among Canada’s largest underdeveloped gold projects, the Courageous Lake project.
According to Seabridge Gold Inc. (NYSE:SA)’s Q2 reports, the company posted a net profit of $0.24 per share, outperforming the estimates by $0.26. The net profit for the same period in 2021 was $0.19 per share. Furthermore, the company’s net working capital reached $244.8 million, compared to $36.9 million at the end of Q4 2021.
Seabridge Gold Inc. (NYSE:SA) is one of the best Canadian gold stocks, in addition to Agnico Eagle Mines Limited (NYSE:AEM), Wheaton Precious Metals Corp. (NYSE:WPM), and Alamos Gold Inc. (NYSE:AGI)
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Disclose. None. 10 Best Canadian Gold Stocks to Buy Right Now is originally published on Insider Monkey.
