Three Dividend-Paying Gold Stocks to Counter Fed Hawkishness

Gold has been making headlines lately, with the spot price reaching a 52-week high of $2055.82 per ounce on May 2nd. However, the price has since fallen back below the $1800 mark. Despite the short-term volatility, experts remain optimistic about gold’s long-term prospects. In fact, many believe that gold will continue to push higher in 2024. According to Bob Carlson, a pension fund chairman and leader of the Retirement Watch investment newsletter, gold is a “crisis hedge” that can protect investors against financial crises and political conflicts.

As borrowing costs increase due to the Fed’s tight monetary policy, many investors are turning to gold as a safe haven asset. And with global political conflicts on the rise, there’s no doubt that gold will continue to be an attractive option for risk-averse investors.

In this watchlist, we’ll highlight the top dividend-paying gold stocks that can provide investors with both capital appreciation and steady income…

Franco-Nevada Corp (FNV)

The precious-metals-focused Franco-Nevada owns a diversified portfolio of gold, silver, and platinum, along with their related royalty streams. The company does not operate mines, develop projects or conduct exploration. Instead, Franco-Nevada’s short-term financial performance is linked to the price of commodities and the production of its portfolio of assets. Mining royalty companies have large portfolios of mining companies as clients and therefore are typically less risky than owning one or two individual mining companies.

Franco-Nevada is a strong contender in the mining financing business. The company offers a unique way to gain exposure to precious metals and has a diversified portfolio of assets without the risks associated with owning individual mining companies. With an annual cash flow of over $500 million and a 1% dividend yield, Franco-Nevada is fundamentally strong and, according to the experts, has the potential for a 35% upside in the next 12 months.

Newmont Mining (NEM) 

Newmont Mining is the world’s largest gold mining operation, with sites in various countries, including the United States, Australia, and Canada. The company’s acquisition of Goldcorp in 2019 has added to its portfolio of mines and assets, with over 100 million ounces of proven and probable gold reserves, in addition to producing silver, copper, and zinc and running a merchant banking operation. The stock is trading at reasonable 15 times forward earnings.

Hinging on no uptick in the price of gold, BofA forecasts Newmont’s earnings per share will rise from $2.85 in 2022 to more than $5 in 2023. With all-in costs of $1,150 per ounce, profits will grow dramatically if gold prices increase. Investors also can be paid for their patience in holding the stock with a 3.3% dividend yield.

Triple Flag Precious Metals Corp. (TFPM) 

Like Franco-Nevada, Toronto-based Triple Flag serves as a finance partner to facilitate the development and expansion of mining projects. With a focus on cash-generating mines and fully permitted projects that can produce cash flow within two years, the company seeks prudent investments in earlier stages of the mine life cycle to maintain exposure to development-stage assets and grow free cash flow per share over the long term. 

While risks include precious metal price volatility, competition from the royalty and streaming sector, and ramp-up issues at its mines, catalysts could include higher-than-expected gold and silver prices, future exploration discoveries, and unexpected mine expansions and acquisitions. TFPM investors enjoy a 1.3% dividend yield.