Best gold stocks in May 2024
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BLUEPRINT
Updated 9:00 a.m. UTC May 3, 2024
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Gold is a popular way to diversify portfolios and hedge against inflation. The precious metal hit an all-time high in December 2023, and some analysts believe gold will continue to rally.
Bank of America analyst Lawson Winder projects gold will average $1,975 an ounce in 2024. “We think tensions in the Middle East have supported the yellow metal as many investors see gold as a haven in times of uncertainty,” Winder said.
We selected the best gold stocks for 2024 based on a consensus “buy” rating among Wall Street analysts, price-to-earnings ratio compared with peers and risk level.
Best gold stocks
- Wheaton Precious Metals Corp. (WPM).
- Franco-Nevada Corp. (FNV).
- Gold Fields (GFI).
- Royal Gold (RGLD).
- Lundin Gold (LUG.TO).
Why trust our investing experts
Experienced stock analysts select our best stock selections based on screening for several must-have metrics. These metrics often include but are not limited to forward price-to-earnings, risk, earning stability and Wall Street “buy” consensus. Among all of our stock selections, the average return beats the S&P 500. But investors should note that before purchasing any stocks, it’s important to do plenty of research and ensure their selections align with their financial goals and risk tolerance. You can read more about our methodology below.
- 5,000+ companies screened.
- 3 levels of fact-checking.
- 3-step editorial review.
Wheaton Precious Metals Corp. (WPM)
Market cap
YTD performance
Franco-Nevada Corp. (FNV)
Market cap
YTD performance
Gold Fields (GFI)
Market cap
YTD performance
Royal Gold (RGLD)
Market cap
YTD performance
Lundin Gold (LUG.TO)
Market cap
YTD performance
Compare the best gold stocks
Methodology
The best gold stocks included above all trade on a major U.S. stock exchange and meet the following criteria:
- Consensus analyst recommendation of “buy” or better. A high number of analyst “buy” ratings indicates an expectation that the stock will outperform the overall market.
- Market capitalization of at least $2 billion. Stocks with less than a $2 billion market cap are considered small and microcap stocks and are often among the most volatile and risky stocks listed on major exchanges. Stocks with market caps above $2 billion are likelier to have analyst and media coverage and plenty of trading liquidity.
- Pays a dividend. Dividends can be an excellent source of income and compound returns for investors. In addition, dividend payments represent tangible value and are a positive reflection of a healthy underlying business.
- Trading volume. We screened for companies with an average daily trading volume of at least 50,000 shares and an average daily trading value of at least $1 million.
- An Altimeter risk level of A or B. The Altimeter risk grade is calculated based on a company’s credit rating, management sentiment and a fundamental forensic assessment of its financial health. Screening for stocks with the lowest financial risk helps reduce the chances of significant downside.
- Lower P/E ratio compared to large peers. Many gold stocks have higher valuations than the overall market. A low but positive P/E implies a company is generating higher earnings than its valuation.
Why other stocks didn’t make the cut
Many top gold mining stocks are high-quality companies with financial visibility and long-term production outlooks. But there are some large players with extremely high valuations, where the market is already pricing in its future earnings.
Investors should also note that several junior gold exploration stocks are extremely high-risk investments. It takes a long time and a lot of money to go through the process of acquiring properties, proving reserves and building an operating mine, and many small and microcap exploration companies never survive long enough to mine their first ounce of gold.
In addition, low-quality gold mines can quickly become uneconomical if the price of gold drops, so investors should focus on companies that have economical production costs even during cyclical declines in gold prices.
Final verdict
Gold prices have risen as investors seek a haven amid several macroeconomic headwinds ranging from inflation to geopolitical uncertainty in the Middle East.
Buying a gold stock allows an investor to have exposure to the increase in gold prices. That said, it can be difficult to find good valuations among higher-quality gold stocks. Among the stocks listed here, the stocks with the most attractive valuations are Lundin Gold and Royal Gold.
How do beginners invest in gold?
Investing in gold can be intimidating for inexperienced investors. But there are several easy options for newbie gold investors. Investors can buy physical gold bullion coins directly from the U.S. Department of the Treasury in weights ranging from one-tenth of an ounce up to one ounce.
Investors can also buy shares of gold stocks, such as the ones mentioned above, in a basic online brokerage account. To reduce risks associated with buying individual stocks, investors can buy shares of diversified gold exchange-traded funds, such as the VanEck Vectors Gold Miners ETF (GDX).
Finally, there are ETFs devoted specifically to gold-related assets, such as physical gold bullion or gold futures contracts. The SPDR Gold Shares (GLD) is a popular example of a physically gold-backed ETF.
Frequently asked questions (FAQs)
Gold exchange-traded funds often hold shares of gold mining, streaming and royalty stocks, gold futures contracts, or physical gold.
ETFs can be a convenient way for investors to gain exposure to gold without buying or storing the physical metal. They can also be a great way for investors to take a diversified stake in dozens of gold stocks simultaneously, reducing the risk of one or two bad stock picks.
Gold stocks can be good investments when gold prices are elevated, but they have historically performed poorly during cyclical downturns in the gold market. The VanEck Gold Miners ETF is up just double digits over the past decade compared to a triple-digit gain for the S&P 500.
Gold typically performs best during economic duress, and economists anticipate a significant U.S. economic slowdown in 2024. However, gold prices are already near all-time highs, suggesting additional upside may be limited in the near term.
Gold stocks and physical gold bullion can be excellent options depending on an investor’s personal goals, time horizon and risk tolerance.
Individual gold stocks can outperform the price of gold because they can grow production, revenue and earnings over time, but gold stocks can also underperform physical gold and have several unique risk factors, including mining accidents, geopolitical unrest and poor exploration results.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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