In this article, we discuss the 10 best gold stocks with dividends. To skip the detailed analysis of the gold segment, go directly to the 5 Best Gold Stocks with Dividends.
Gold prices and demand experienced volatility throughout 2022, mainly due to inflation and Federal Reserve interest rate hikes. Between 2020 and 2021, gold saw an increasing demand due to uncertain economic conditions because of the COVID-19 pandemic. In July, gold price dropped below the $1800per ounce mark for the first time since February 2022. In October, gold price averaged $1664 per ounce, down 7% compared to the same period in 2021.
In recent news, spot gold saw a 2% increase earlier in November to $1740 per ounce due to a cool-down in inflation earlier in October. The following day, David Meger, director of metals trading at High Ridge Futures, said:
"When we start to see inflationary data showing that inflation is coming down, there is an expectation that the Fed is going to begin to slow the pace of those interest rate hikes."
He further added:
"Hence you could argue that the dramatic pressure that has been applied to the gold market over the last several months has been released and gold now has the ability to move higher."
Gold Demand
Gold demand surged at the beginning of the year by 34% YoY and the prices rose by 8%. The demand in Q1 was 19% above the 5-year average. However, the second quarter saw the demand soften by 8%.
In the third quarter, gold saw a stronger demand and was 28% higher in the quarter compared to the same period in 2021. Moreover, the demand increased by 18% YoY in the first nine months of 2022, reaching the pre-pandemic levels.
Analyst Forecasts
UBS believed that the gold prices will average $1,650-1,700 per ounce from July to December 2022 even though it recognizes the metal’s resilience. The Economy Forecast Agency keeps a bullish view on gold for 2023. The firm expects gold price to be over $2000 per ounce throughout the year reaching a high of $2,536 per ounce in September before closing the year at $2,391.
According to a report, the global gold market is estimated to grow from $214.1 billion in 2021 to $249.6 billion by 2026 at a CAGR of 3.1%.
Even during the declining prices of gold, the metal can be expensive to own. However, there are some gold stocks that would be beneficial for investors to buy for future financial benefits and steady dividend income. Newmont Corporation (NYSE:NEM), Agnico Eagle Mines Limited (NYSE:AEM), and Barrick Gold Corporation (NYSE:GOLD) are some of the best gold stocks with dividends.
10 Best Gold Stocks with Dividends
Our Methodology
We thoroughly studied the gold market and the companies that are involved in gold mining. After the assessment, we compiled a list of the 10 best gold stocks that pay dividends. The stocks were chosen based on their business fundamentals, financial history, and growth catalysts that might come into play.
DRDGOLD Limited (NYSE:DRD) is a South African gold mining company with mineral reserves of 5.35 million ounces of gold. Moreover, the company’s annual production of gold stands at an average of 180,000 ounces.
As of December 2, DRDGOLD Limited (NYSE:DRD) has a dividend yield of 4.79%. which is relatively lower than the South African companies but higher compared to the rest of its gold-producing peers. The company pays out its dividends semi-annually, and with its strong cash position, DRDGOLD Limited (NYSE:DRD) can easily manage its 56.3% cash payout ratio.
DRDGOLD Limited (NYSE:DRD) got noticed by a few notable hedge funds in the third quarter of 2022. Three additional hedge funds added the company to their portfolio, bringing the total number of bullish hedge funds to 5. In Q3, Renaissance Technologies was the largest stakeholder in DRDGOLD Limited (NYSE:DRD) with 949,514 shares, worth $5.18 million.
Newmont Corporation (NYSE:NEM), Agnico Eagle Mines Limited (NYSE:AEM), and Barrick Gold Corporation (NYSE:GOLD) are some of the best gold stocks with dividends along with DRDGOLD Limited (NYSE:DRD).
Centerra Gold Inc. (NYSE:CGAU) is a Canadian mining company. 40% of the company’s revenue is attributed to gold and 30% each to copper and molybdenum. As of November 8, National Bank analyst Mike Parkin reiterated an Outperform rating on the company shares with a C$10.50 price target, down from C$11.
Centerra Gold Inc. (NYSE:CGAU) is one of the best gold stocks with dividends because of its noteworthy dividend yield of 3.89%. On November 7, the company declared a dividend of C$0.07 which was paid out on December 2. Additionally, on October 11, Toronto Stock Exchange accepted Centerra Gold Inc. (NYSE:CGAU)’s notice for normal course issuer bid to repurchase 10% of its shares over the course of one year. The total shares are valued at over $100 million. On top of that, Centerra Gold Inc. (NYSE:CGAU) is on track for its gold and copper production guidance.
Despite the rough economic conditions of the gold sector, Centerra Gold Inc. (NYSE:CGAU) was able to produce healthy Q3 results. The company reported an EPS of -$0.06, compared to the -$0.08 estimates. The revenues of $179 million represented approximately a 19% YoY decline but were $24.05 million above the market forecasts.
SSR Mining Inc. (NASDAQ:SSRM) is a Colorado-based mining company primarily focusing on gold and other metals such as silver, copper, zinc, and lead. The company owns the largest silver mine in Argentina. On November 9, Canaccord analyst Dalton Baretto reaffirmed a Buy rating on SSR Mining Inc. (NASDAQ:SSRM) and lowered the price target to $25 from $26.
SSR Mining Inc. (NASDAQ:SSRM) has been paying dividends for the past two years and as of December 2, the company has a dividend yield of 1.77%. The company declared its latest dividend of $0.07 on November 8, payable by December 19 to the shareholders of record on November 18. Moreover, SSR Mining Inc. (NASDAQ:SSRM) returned approximately $100 million to its shareholders in Q3 2022, with $85.4 million in share buybacks and $14.3 million in dividends.
In the third quarter of 2022, 16 hedge funds had a stake worth $232.948 million in SSR Mining Inc. (NASDAQ:SSRM), compared to 15 hedge funds with shares worth $206.187 million in the previous quarter.
SSR Mining Inc. (NASDAQ:SSRM) is one of the best gold stocks with dividends due to its current valuation and asset-heavy balance sheet as mentioned by Palm Valley Capital Management in its Q3 2022 investor letter. Here is what the firm said:
“We also purchased SSR Mining (NASDAQ:SSRM) during the quarter. SSR Mining is a precious metals mining company that we previously sold in November 2021 after it reached our valuation. SSR Mining’s stock has fallen significantly this year due to lower precious metal prices and the temporary closure of its Copler mine. We repurchased its shares in late September after the Copler mine restarted on schedule, since the stock remained depressed. SSR Mining should generate significant free cash flow at current gold and silver prices and has a very strong balance sheet with over $600 million in net cash and $4.1 billion in stockholders’ equity. While we expect the stock to remain volatile, we believe the company is selling at an attractive price relative to its asset-heavy balance sheet and our net asset valuation.”
Osisko Gold Royalties Ltd (NYSE:OR) is a Canadian company that generates its revenue from royalties, net smelter returns, and precious metals streaming. It focuses on gold, silver, and diamonds. On November 14, TD Securities analyst Greg Barnes maintained a Buy rating on Osisko Gold Royalties Ltd (NYSE:OR) and raised the price target from C$20 to C$21.
Osisko Gold Royalties Ltd (NYSE:OR) is one of the best gold stocks with dividends because of its business model. Despite the gold sector facing a battering due to high inflation, the company is relatively inflation resistant. Most of its revenue is generated from royalty payments, resulting in lower expenses and high margins of around 90%. Osisko Gold Royalties Ltd (NYSE:OR) has around 5% net smelter royalty in the Canadian Malartic Mine which is one of the world’s largest underground gold-producing mines. Moreover, the company’s latest stream on the Tintic Project in Utah is said to produce the highest grade gold in the whole world.
In the third quarter, 20 hedge funds owned Osisko Gold Royalties Ltd (NYSE:OR) stock compared to 17 in the previous quarter. Millennium Management held the most significant amount of company shares in the third quarter of 2022.
Alamos Gold Inc. (NYSE:AGI) is a Canadian gold producer headquartered in Toronto, Canada. Currently, the company operates three mines and has additional projects under development in Canada, Mexico, Turkey, and the U.S.
Alamos Gold Inc. (NYSE:AGI) is one of the best gold stocks with dividends as it reported encouraging third-quarter results despite the gold stocks experiencing a decline. The company’s Q3 revenues were up around 8% on a YoY basis to $213.6 million, beating the estimates by $2.8 million. In addition, Alamos Gold Inc. (NYSE:AGI) posted a non-GAAP EPS of $0.07 which was in line with the forecasts. The gold production saw a 19% QoQ increase to 123,400 ounces which was the highest quarterly production in almost two years.
On November 30, National Bank analyst Mark Parkin reaffirmed an Outperform rating on Alamos Gold Inc. (NYSE:AGI) with a $15 price target, up from $13.
As of December 2, Alamos Gold Inc. (NYSE:AGI) has a dividend yield of 1%. The company declared a quarterly dividend on November 22, payable by December 20 to the shareholders of record on December 6. In the first three quarters of 2022, Alamos Gold Inc. (NYSE:AGI) returned $37.5 million to its shareholders through dividends and repurchased of 1.1 million shares worth $8.2 million.
Alamos Gold Inc. (NYSE:AGI) is a noteworthy gold stock that pays dividends, in addition to Newmont Corporation (NYSE:NEM), Agnico Eagle Mines Limited (NYSE:AEM), and Barrick Gold Corporation (NYSE:GOLD).
