Three gold mining companies to cover your portfolio


US inflation hit a four-decade high in December. Yet the federal funds rate is close to zero. As traditional gold against inflation, gold protects a portfolio from rising prices. Here are three gold mining stocks to buy: Newmont Corporation, Gold Fields and Barrick Gold.

US inflation data for December showed prices for goods and services rose 7% year-on-year, the fastest pace in nearly 40 years. Although it has significantly exceeded the Federal Reserve’s target, the central bank does not plan to raise the federal funds rate to fight inflation.

At least not yet. It continues to buy bonds as part of its quantitative easing program, and the first rate hike is not expected until March.

How can investors protect their portfolios against rising inflation? One way is to gain exposure to gold, a traditional inflation hedge. Here are three gold mining stocks to buy to protect the portfolio against inflation: Newmont Corporation, Gold Fields and Barrick Gold.

Newmont Society

Newmont is an American company from Denver, Colorado. It employs nearly 15,000 people and was founded in 1916. It operates gold production and exploration fields and mines in various countries such as Peru, Chile, Ghana, Canada and the United States.

Newmont’s share price has been broadly stable over the past twelve months. As the price of gold underperformed, gold mining stocks also struggled to perform.

However, gold mining companies pay a dividend with a higher yield than most other industries. For example, Newmont’s forward dividend yield is 3.58% and the dividend payout ratio is 73.53%. In addition, the dividend growth rate over five years is 77.46%.

Gold Fields

Gold Fields is a South African gold mining company based in Sandton. It has international operations in countries like Chile or Australia, and its shares are listed on the New York Stock Exchange under the ticker GFI.

The share price is up +16.29% over the past twelve months and the company is also paying a dividend. The dividend payout rate is 30.95% and the five-year growth rate is 49.92%.

Another attractive factor is the gross profit margin, which is 43.37% above the industry median.

Barrick Gold

Barrick Gold is a Canadian gold and copper mining company. Based in Toronto, it operates mines in Canada, Argentina and Tanzania, to name a few countries.

It also pays a large dividend and its gross profit margin also exceeds the industry median – 41.37% against 30.39% of the industry median. At the current share price, Barrick Gold has reached a market capitalization of $33.77 billion.

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