The demand for gold as a safe-haven asset has risen since the start of the year due to bearish market sentiment and surging market volatility. Given current geopolitical conflicts and surging inflation, U.S. investment bank Goldman Sachs has pushed up its gold price projections. The gold price climbed to $2020.98/oz overnight, registering the highest level since the middle of 2020. Due to the rising geopolitical instability, Goldman Sachs is hinting at increased demand for gold from consumers, investors, and central banks.
The bullish sentiment surrounding the industry is evident in iShares Gold Trust ETF’s (IAU) 10.5% gains over the past year. Gold mining stocks can potentially offer increased stability. Gold mining companies are primarily benefiting from the rising gold prices and have strong growth prospects, thus making them attractive investments now.
Given these factors, popular gold mining companies Yamana Gold Inc. (AUY), Centerra Gold Inc. (CGAU), and Centamin plc (CELTF) could be wise investment bets now.
Click here to check out our Gold and Silver Industry Report for 2022
Yamana Gold Inc. (AUY)
AUY is a leading precious metal producer that owns and operates gold, silver, and copper mines. It is headquartered in Toronto, Canada. The company has gold and silver production, development stage properties, and land positions throughout the Americas, including Canada, Brazil, Argentina, and Chile.
On Dec. 2, 2021, AUY received a permit for its Jacobina mine to raise throughput to 10,000 tonnes per day. This result is the culmination of the two-year process in which AUY worked closely with government agencies to ensure the responsible and sustainable ways in which it operates. The permit is expected to boost the company’s sales and profits.
In the fiscal year 2021 fourth quarter, ended Dec. 31, 2021, AUY's revenue increased 9.1% year-over-year to $503.80 million. Its net earnings attributable to Yamana equity holders grew 6.5% year-over-year to $109.70 million. The company's cash inflow from operating activities rose 31.2% year-over-year to $238.20 million.
The $471.87 million consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents 11.8% year-over-year growth. The $0.07 consensus EPS estimate for the current quarter indicates a 19.6% year-over-year rise from the prior-year period.
Shares of AUY have increased 27.7% in price year-to-date and 41.8% over the past three months. It closed yesterday's trading session at $5.39.
AUY's POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. AUY has a grade of B for Quality. Within the Miners-Gold industry, it is ranked #9 of 33 stocks.
To see additional POWR Ratings (Growth, Value, Stability, Momentum, and Sentiment) for AUY, click here.
Centerra Gold Inc. (CGAU)
CGAU is a gold mining company and is headquartered in Toronto, Canada. The company acquires, explores for, develops, and operates gold and copper properties in North America, Asia, and internationally. CGAU operates two mines primarily: the Mount Milligan Mine in British Columbia, Canada; and the Oksut Mine in Turkey.
Last month, CGAU completed the acquisition of Gemfield Resources LLC, owner of the Goldfield District Development Project, from Waterton Nevada Splitter, LLC. This acquisition might boost the company’s profitability.
CGAU's revenues increased 18.4% year-over-year to $251.10 million in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. CGAU’s net earnings from continuing operations grew 769.9% year-over-year to $274.90 million. The company's net earnings rose 188.8% year-over-year to $274.90 million. Its earnings per common share improved 190.6% year-over-year to $0.93.
Analysts expect CGAU’s revenue for its fiscal year 2022, ending Dec. 31, 2022, to come in at $1.13 billion, representing a 25.6% rise year-over-year.
The stock gained 27.5% in price year-to-date and 42.9% over the past three months. CGAU closed yesterday’s trading session at $9.59.
CGAU's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. CGAU has a grade of A for Quality. It has a grade of B for Sentiment and Value. Within the Miners-Gold industry, it is ranked #1 of 33 stocks.
To see additional component grades of POWR Ratings (Stability, Growth, and Momentum) for CGAU, click here.
Centamin plc (CELTF)
CELTF is a mineral exploration, development, and mining company. It is headquartered in Saint Helier, Jersey. The company operates in Australia, Jersey, Egypt, Burkina Faso, and Cote d’Ivoire. CELTF explores gold ore deposits. Its principal asset is the Sukari Gold Mine (SGM) project, which covers an area of approximately 160 square kilometers located in the Eastern Desert of Egypt.
In February, CELTF announced the transition of the underground operations at its Sukari Gold Mine from contractor-mining to owner-operator mining following an independently managed tender process. This transition is expected to deliver growth, operational benefits, and cost savings.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, CELTF’s revenue increased 21.8% year-over-year to $183 million. The company’s total assets rose marginally year-over-year to $1.42 billion for the period ended Dec.31, 2021.
The stock price has improved 6.7% year-to-date and 14.8% over the past three months. CELTF closed yesterday’s trading session at $1.32.
CELTF's POWR Ratings reflect this strong outlook. The stock has an overall B rating, which translates to Buy in our POWR Ratings system. It has a grade of B for Stability. It is ranked #4 of 33 stocks in the Miners-Gold industry.
Click here to see CELTF’s POWR Ratings for Growth, Value, Momentum, Quality, and Sentiment.
Click here to check out our Gold and Silver Industry Report for 2022
AUY shares were trading at $5.23 per share on Wednesday afternoon, down $0.16 (-2.97%). Year-to-date, AUY has gained 23.93%, versus a -10.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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