Investing in precious metal mining stocks can provide excellent exposure to gold, silver, platinum, and palladium prices while also offering the potential for share price appreciation if a company makes a big discovery or expands production.
In this comprehensive guide, we’ll review the 5 best precious metal mining stocks to consider buying right now based on factors like production, reserves, valuation, analyst ratings, and more. We’ll provide an in-depth look at each company to help you decide which are the most promising investment opportunities.
Additionally, we’ll answer common questions about precious metal mining stocks like “What is the best precious metal stock to buy?” and “Which is the best mining stock?” to help you feel confident investing in this sector. Read on for our top picks and everything you need to know about investing in precious metal miners.
Top 5 Precious Metal Mining Stocks
Here are our choices for the top 5 precious metal mining stocks to buy right now:
- Newmont Corporation (NEM)
- Barrick Gold Corp (GOLD)
- Franco-Nevada Corp (FNV)
- Wheaton Precious Metals (WPM)
- Royal Gold Inc (RGLD)
Keep reading for an in-depth look at each company and why we selected them as the best precious metal mining stocks now.
1 Newmont Corporation (NEM)
Newmont is the largest gold mining company in the world and our top pick thanks to its rock-solid balance sheet, steadily growing production profile, and investments in key growth projects.
Pros
- Largest gold reserves and production of any company
- Strong balance sheet with investment-grade credit rating
- Low production costs and high margins
- Projects coming online to grow production
- Attractive dividend with nearly 4% yield
Cons
- Single metal focus on gold
- Lower leverage to gold prices than some peers
Newmont produced over 5.9 million ounces of gold in 2021 from its mines in the Americas, Africa, and Australia. The company expects annual production to exceed 7 million ounces per year by 2024 driven by new investments.
Importantly, Newmont boasts the largest gold reserves in the industry at over 92 million ounces. This reserves base ensures decades of production ahead.
The miner generates strong cash flows with all-in sustaining costs averaged under $1,050 per ounce in 2021. Profits get returned to shareholders through an annual dividend that currently yields around 4%.
Newmont offers investors exposure to gold with a large, diversified production profile, rock-solid balance sheet, attractive dividend, and growth projects in the pipeline.
2 Barrick Gold Corp (GOLD)
As the second largest gold miner globally, Barrick Gold gives investors exposure to over 80 million ounces in gold reserves and operations on 4 continents.
Pros
- Second largest gold miner in the world
- Highly diversified production base
- Disciplined capital allocation
- Net cash position with investment-grade balance sheet
- Good blend of yield and leverage to gold
Cons
- Gold focused miner with minimal other metals
Barrick produced over 4.4 million ounces of gold in 2021 from mining complexes in North and South America, Africa, and the Middle East. The company has targeted annual production of around 4.6 million ounces in 2022 and 2021.
The miner has done an exceptional job strengthening its balance sheet and now holds a net cash position with nearly $6 billion in cash and equivalents. Barrick also has a strong investment grade credit rating.
One of the key attractions for investors is Barrick’s quarterly dividend with a current yield of nearly 2%. The company also has good leverage to higher gold prices. Shares have outperformed the metal since late 2018.
For investors who want a large, financially sound gold producer with global reach, Barrick is an excellent choice.
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3 Franco-Nevada Corp (FNV)
Franco-Nevada operates a unique royalty and streaming model, providing investors with high margins, dividend growth, and reduced operational risks compared to miners.
Pros
- Royalty business model means high margins and no operating risks
- Unhedged exposure to gold, silver, platinum, and oil/gas
- Rapidly growing dividend
- Funding additional royalty deals
- More diversified than traditional miners
Cons
- Higher valuations than miners
- Less sensitivity to metal price changes
Franco-Nevada acquires royalties and streams on producing mines operated by other companies. This creates high margins and reduces risks since FNV doesn’t operate mines or facilities directly.
The company has royalty exposure to nearly 50 producing mines. Precious metals like gold, silver and platinum account for around 85% of revenue. Oil & gas make up most of the remainder.
Franco-Nevada pays out a quarterly dividend that has seen rapid growth over the past decade, rising at a 15% CAGR. The dividend yield sits around 1.3% currently.
The company uses its robust cash flows to continually acquire new royalties and streams, fueling further growth. It’s a proven business model that gold investors have embraced.
4 Wheaton Precious Metals (WPM)
Like Franco-Nevada, Wheaton Precious Metals operates a royalty and streaming model on precious metal mines. This creates strong cash flow with reduced risks.
Pros
- Diversified royalty streams on mines around the world
- Majority of revenue from gold and silver
- Dividend initiated in 2021 with potential for growth
- Investment grade balance sheet
- Upside optionality from development assets
Cons
- Operational risks if mining partners have issues
- Doesn’t operate any mines directly
Wheaton generates revenues from royalties and metal purchase agreements on assets located across North and South America, Europe and Africa. Approximately 40% of 2022E revenue stems from gold.
The company initiated a dividend in early 2021 to return capital to shareholders. The dividend currently yields around 1.4% with potential for steady increases over time.
Wheaton does not hedge any prices, so investors get full exposure to the upside in metals. It also has royalty interests on development projects not yet in production to provide future growth.
If you want royalty exposure primarily to gold and silver from a growing dividend payer, Wheaton Precious Metals is an excellent choice.
5 Royal Gold Inc. (RGLD)
Our final top precious metals mining stock pick is Royal Gold, another large royalty and streaming company with a high-quality portfolio of assets producing gold and silver.
Pros
- Oversaw an increase in dividends for 20 consecutive years
- Debt-free balance sheet
- Cash flow funds new acquisitions
- Portfolio of royalties on gold and silver mines
- High exposure to precious metals
Cons
- Relies on partners to operate mines capably
- Susceptible to mine production issues
Royal Gold holds 187 properties on mines across the Americas and Africa. The company does not operate any mines directly but rather receives royalties on production. This results in high margins and reduced risk.
The company boasts an investment grade balance sheet with $892 million in cash on hand and no long-term debt. This financial flexibility allows Royal Gold to continue acquiring new royalty streams.
Royal Gold has increased its annual dividend for 20 consecutive years, an impressive track record of shareholder returns. The dividend currently yields around 1.3%.
READ ALSO: Choosing the Best Gold IRA Custodian for You
Factors to Consider When Analyzing Precious Metal Mining Stocks
When researching and comparing precious metal mining stocks, be sure to look at these key factors:
Production and Reserves
- How much gold/silver/platinum does the miner produce annually? Is production growing or declining?
- What are the company’s total reserves? This indicates the lifespan of their mines.
- What is their average all-in sustaining cost per ounce of production? Lower is better.
Portfolio Diversification
- How diversified is the company’s portfolio of mining assets? More diversity lowers risk.
- Is their production concentrated in one country or spread across many?
- Do they mine multiple metals like gold, silver, and platinum? Or just gold/silver?
Balance Sheet and Cash Flows
- Does the miner have a strong balance sheet or a worrisome debt load?
- What is their current valuation? Does it offer a bargain price?
- Do they generate robust operating cash flows? This funds growth.
Management and Shareholder Returns
- Does management have a track record of good capital allocation and creating shareholder value?
- Do they pay a dividend? If so, does it offer an attractive yield with growth potential?
Analyst Sentiment
- What is the consensus opinion among analysts covering the stock? Favorable ratings indicate upside potential.
Using factors like these allows you to separate the most promising precious metal miners from the risky or mediocre ones.
Should You Buy Precious Metal Mining Stocks?
Here are some of the key benefits of buying precious metal mining stocks as part of a diversified portfolio:
- Leveraged exposure to metal prices – Miners tend to see shares rise faster than the underlying metal prices. This provides leverage.
- Potential for share price appreciation – Successful discoveries and expanded production can rapidly boost share prices.
- Income through dividends – Most precious metal miners pay dividends, providing income along with metal exposure. Yields are often 1-4%.
- Diversification benefits – Precious metal miners tend to be less correlated to general equity markets than other stocks.
- Increased access to metals – Buying shares in a miner gives you exposure to far more metal than you could buy directly.
- Professional management – You benefit from the mining and geological expertise of the companies.
Of course, risks include operational issues, declining mine production, poor management, share dilution, project delays, rising costs, geopolitical factors, and fluctuating metal prices. Volatility comes with the sector.
But precious metal mining stocks offer a smart way to invest in metals while bringing the potential for leveraged upside and income generation.
To Recap
While volatile, investing in shares of precious metal mining companies can be highly rewarding. By picking companies with world-class assets, solid balance sheets, attractive valuations, and experienced management, you position yourself for leveraged upside to metal prices plus dividends.
Our top miners – Newmont, Barrick Gold, Franco-Nevada, Wheaton Precious Metals, and Royal Gold – are leaders in gold and silver production. They offer diversified exposure to metal prices, strong operations, and shareholder returns.
Use our research on the top precious metal stocks as a starting point. But be sure to continue doing your own due diligence before investing in any miner. Precious metal mining stocks can play an important role in a diversified portfolio – especially amid economic uncertainty.
Precious Metal Mining Stocks FAQs
Let’s look at answers to common questions investors have about buying precious metal mining stocks:
What is the best precious metal stock to buy?
Based on its massive production profile, rock-solid balance sheet, attractive valuation, and growth projects – our top pick among precious metal stocks is Newmont Corporation. As the largest gold miner globally, Newmont offers unparalleled exposure to gold through its operations on four continents.
Which is the best gold mining stock?
The best gold mining stocks are Newmont (NEM), Barrick Gold (GOLD), Franco-Nevada (FNV), and Wheaton Precious Metals (WPM). Each provides diversified exposure to gold production and reserves through mining operations or royalties. These stocks also have strong balance sheets and cash flows.
Which is the best silver mining stock?
Some of the best silver mining stocks are Wheaton Precious Metals (WPM), Pan American Silver (PAAS), SilverCrest Metals (SILV), and First Majestic Silver (AG). These miners have solid silver production from mines primarily in North and South America.
Which mining stocks pay dividends?
Some top precious metal mining stocks with dividends include Newmont (NEM), Barrick Gold (GOLD), Franco-Nevada (FNV), Royal Gold (RGLD), and Wheaton Precious Metals (WPM). Dividend yields range from around 1-4% currently.
Which metal stocks are the best to buy today?
The best metal and mining stocks to buy right now include Newmont (NEM), Barrick Gold (GOLD), Freeport-McMoRan (FCX), Southern Copper (SCCO), and Cleveland-Cliffs (CLF). These companies have solid production profiles, strong market positions, upside potential, and attractive valuations.
Which mining stocks will rise?
Some mining stocks poised for gains include Teck Resources (TECK), Hudbay Minerals (HBM), Turquoise Hill Resources (TRQ), Sherritt International (S), and Western Copper & Gold (WRN). Analyst upside estimates, growth catalysts, and cheap valuations suggest substantial appreciation potential.
In another related article, What is a Self-Directed Gold IRA and How Does It Work? The Complete Guide
