Dividend-Paying Gold Stocks Are on Fire and May Be the Best Hedge If the Market Blows Up

There has been no ambiguity from Federal Reserve Chair Jerome Powell. He and the rest of Washington, D.C., over the past year have had to face the music over spiraling inflation and the rampant government spending spree that took inflation to the highest levels in over 40 years. While the searing inflation has fallen from 9.1% down to 6.0% on a year-over-year basis, that decline comes after almost a 5% increase in the federal funds rate over the past year, and there is a good chance we are about to see another 25-basis-point hit.

The question for investors is what to do now. One of the best ideas has always been to seek positions in commodities, and the best area for investors to look at there is top gold miners and royalty companies. While gold has exploded higher over worries of a financial sector meltdown, it has backed up some, offering investors another chance to grab the glittering bullion.

We screened the BofA Securities gold-mining research universe looking for the top stocks and found six that are rated Buy, have very respectable dividends and look like great ideas for worried investors now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Agnico Eagle Mines

This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold-mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.

The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.

The stock has rallied recently but remains well off 52-week highs printed last year. With ongoing inflation and the threat of continued financial sector issues, you can bet many savvy portfolio managers are ready to add back top companies like this.

Shareholders receive a 3.15% dividend. The BofA Securities price target for Agnico Eagle Mines stock is $58, and the consensus target is $61.66. Shares ended Tuesday trading at $49.47 apiece.

Barrick Gold

This is another top gold stock, and it still offers a solid entry point. Barrick Gold Corp. (NYSE: GOLD) and Randgold Resources completed their merger on January 1, 2019. This created the world’s largest gold company in terms of production, reserves and market capitalization.

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