The Number Two Slot
Barrick Gold Corporation (USA) (NYSE:ABX) mines gold, silver, and copper. The company’s big issues today are the falling price of gold and the construction of a massive project that isn’t going very well. Barrick Gold Corporation (USA) (NYSE:ABX) can’t do much about gold prices. That makes construction the bigger problem at the moment and it has long-term implications since mines are depleting assets.
Barrick Gold Corporation (USA) (NYSE:ABX) has two notable projects, one in the Dominican Republic that is going well enough and one spanning the border of Argentina and Chile that looks like a complete disaster. Chile ordered construction to be halted because of concerns about the mine’s impact on glaciers. Argentina has the same concerns, though it hasn’t stepped in yet. dust control, meanwhile, is another issue being brought up at the project.
The mine is a huge investment and would materially increase the company’s access to and output of gold. Delays are a big problem, but a complete closure would be a huge setback. This on top of the volatility in gold has left Barrick Gold Corporation (USA) (NYSE:ABX) trading lower. That said, news is more likely to drive the stock than fundamentals right now. Barrick Gold Corporation (USA) (NYSE:ABX) sports a yield of over 4% and has been increasing its distribution in recent years.
Pulling up the Rear
Agnico Eagle Mines Ltd (USA) (NYSE:AEM) produces gold, silver, zinc, and copper. It’s most valuable assets are in Canada and operate with very low costs. That’s the good news. Newer investments, however, have encountered problems.
The list of negatives at new properties includes operating in hostile weather environments and mine disasters. Costs are more likely to head higher over the near term than lower. However, so long as gold prices remain elevated, the company has plenty of time to get its house in order.
Meanwhile, with an over 3% dividend yield, investors can benefit from a miner that has been able to increase its output about four times over in the last five years. That underlying growth is a notable positive for those seeking a longer-term gold investment.
A Safe Haven
Gold is a safe haven investment. If Hussman is correct about the downside risk in the market, now might be a good time to consider gold miners. Barrick is probably the riskiest option above based on its construction troubles. Agnico Eagle Mines Ltd (USA) (NYSE:AEM), meanwhile, appears to have the best underlying business.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Golden Dividend Ideas From A Bear originally appeared on Fool.com is written by Reuben Brewer.
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