Three Dividend-Paying Gold Stocks to Counter Fed Hawkishness

Gold has been making headlines lately. The spot price reached $2,364 per ounce Tuesday after hitting record highs for seven straight sessions and trading at $2,336 per ounce Monday. Year over year, gold is up 16.5%.

Investors who expect the Federal Reserve to cut its benchmark interest rate are the main force driving up prices, but the surge is boosted by other factors, including central banks — led by China — buying up gold to ease reliance on US dollars.

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 45% upside in the next 12 months.

Coeur Mining (NYSE:CDE)

Coeur Mining recently announced a private placement of flow-through shares aimed at advancing exploration at its Silvertip mine, signaling a proactive approach to expanding its silver production capabilities. This move, coupled with a reported year-end 2023 proven and probable reserves of 3.2 million ounces of gold and 243.9 million ounces of silver, underscores Coeur Mining’s robust asset base and growth potential.

Moreover, Coeur Mining’s strategic initiatives, including the expansion of its Rochester silver and gold operation in Nevada, highlight the company’s commitment to increasing production and improving operational efficiencies. These developments are particularly noteworthy as the demand for precious metals continues to rise amidst global economic uncertainties and inflationary pressures.

Despite facing challenges common in the mining sector, such as fluctuating metal prices and operational hurdles, Coeur Mining has demonstrated resilience and a capacity for strategic growth. The company’s focus on expanding its silver and gold production, improving cost structures, and advancing key projects positions it well for future success.

“We think that this is the time that Coeur Mining could outperform over the next few years because they’ll get to free cash flow, which will be a first right now and they can start potentially paying dividends,” said top hedge fund manager David Neuhauser .

Given these factors, Coeur Mining presents a compelling investment opportunity for those looking to diversify their portfolios with a U.S.-listed precious metals producer poised for growth. With its strategic investments in exploration and development, coupled with a favorable precious metals market, Coeur Mining is well-positioned to deliver value to its shareholders in the coming years.

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.