7 Best Gold Stocks for 2023

“Gold may or may not be a particularly good inflation hedge,” but it has held its value over time, according to Forbes Advisor. But investing in gold itself means having to store and protect the bars or coins, which isn’t always practical.

See: 3 Things You Must Do When Your Savings Reach $50,000

Some investors purchase gold stocks instead. While not a pure play like owning the metal — gold companies might be involved in activities other than mining gold, and stock prices rise and fall based on factors other than the price of gold — stocks give you exposure without having to hold the metal. They’re a good alternative for investors who want a little more diversity in their portfolio and prefer investments that are easier to buy and sell.

But which are the best gold stocks to buy?

What Are the Best Gold Stocks To Invest In?

Gold company stock prices will vary based on more than just today’s market value.

When you’re evaluating companies for your next investment, you want to look at the company’s fundamentals, its leadership, the past performance of the stock, how much gold the company typically produces in a year and its cash assets. Also consider the level of risk. A growth stock might be a good choice for someone willing to take on extra risk for potentially higher gains — and a bad choice for a more conservative investor.

Here’s a list of some of the best gold stocks today based on expert recommendations and evaluations.

7 Best Gold Stocks To Invest In for 2023

Here are seven gold mining companies that appear to be rated as “buys” right now by experts.

1. Barrick Gold

Why it stands out: 17 out of 24 Wall Street analysts watching Barrick Gold in February gave it a buy or strong buy rating, with seven analysts advising investors to hold the stock. Experts predict the stock could rise 32% in the next 12 months.

Pros

• Reported strong production in the fourth quarter of 2022 at some locations

• Top gold producer in North America

• Company seeks to increase its gold and copper reserves

Cons

• Not a growth stock

What To Watch For

The company expects to increase gold production in 2023 compared to 2022. Disappointing production contributed to an 18% decline in share price since February 1.

2. Newmont

Why it stands out: As the second-largest publicly traded gold stock based on market cap, Newmont is impossible to ignore. Financial reports showed three years of rising sales before a slight dip in 2022. Right now, the stock is considered a momentum play, with analysts cautious despite a target price 54% above the current price of $44.49.

Pros

• 3.67% dividend

• Stock has momentum

• Stable investment

Cons

• Has beat Zacks earnings estimates just once in the last four quarters.

What To Watch For

Some analysts have downgraded estimates recently.

3. Franco-Nevada

Why it stands out: Franco-Nevada is the largest gold mining company traded in North America based on market cap. The American Association of Individual Investors has a positive fundamental 12-month outlook for the stock, which could mean it’s a good investment.

Pros

• High growth stock

• Diversified portfolio of gold, platinum, oil, gas and other assets

• Strong business development

• Strong balance sheet

Cons

• Low dividend yield of 1.02%

• Quarterly sales growth down year-over-year

What To Watch For

Zacks Rank is calling Franco-Nevada a “hold,” saying the stock may be overvalued right now.

4. Royal Gold

Why it stands out: Analysts give Royal Gold stock a consensus “buy” rating, with six analysts rating it a “buy” and six recommending that investors hold the stock. Analysts believe the stock could gain about 21% in the next year.

Pros

• Expert analysts predict growth

• Dividend yield of 1.24%

• Dividends have increased steadily over 20 years

Cons

• Could be overvalued

What To Watch For

Royal Gold stock prices haven’t had a great track record in recent years, but revenue is up during that time, indicating growth potential.

5. Wheaton Precious Metals Corporation

Why it stands out: Analysts give Wheaton Precious Metals Corp. a consensus rating of buy, with only one hold rating.

Pros

• Investors predict 12-month gains of 27%

• Dividend yield of 1.44%

• Company carries very little debt

Cons

• Stock may be overvalued

What To Watch For

Analysts expect Wheaton to report a year-over-year earnings decline in its upcoming earnings release.

6. Rio Tinto Group

Why it stands out: This global gold mining company recently acquired Turquoise Hill Resources, which promises to “deliver significant benefits for all shareholders,” according to a company press release.

Pros

• Stock may be undervalued

• Growth could outperform the market

• High dividend yield of 6.77% — goes ex-dividend on March 9

Cons

• Carries debt

What To Watch For

Unlike some of the other gold companies on this list, Rio Tinto does carry debt. It increased its capital investments last year, and some analysts believe the stock price may decline in 2023.

7. Agnico Eagle Mines Ltd.

Why it stands out: 10 out of 17 Wall Street analysts reported by Yahoo Finance have given Agnico Eagle Mines Ltd. a strong buy or buy rating. The company’s mineral reserves of roughly 24.1 million ounces of gold, along with silver, zinc and copper, have made it highly profitable in recent years.

Pros

• Strong company fundamentals

• Steady profit growth over last three years

• 3.41% annual dividend yield — goes ex-dividend on May 31

Cons

• Lagging the market

What To Watch For

Agnico Eagle Mines has set a high bar for itself in terms of beating analyst forecasts.

Gold vs Gold Stocks

Gold prices, like other precious metals, tend to be fairly stable and hold their value over time. This means gold investments are likely to be less volatile than other investments, such as high-growth tech stocks.

However, investing in gold bullion can be complicated and has a number of drawbacks. First of all, you’ll need a secure place, such as a home safe, to store your gold. You’ll want to make sure your homeowners insurance covers the loss, theft or damage of gold bullion. And if you decide you want to cash out your gold, you’ll need to find a buyer. It isn’t as easy as selling stocks through an investment app.

You might also consider investing in gold coins or gold jewelry, but these tend to cost more than the actual value of the gold. Again, they can be difficult to store and protect against loss or theft, and if you want to sell them, you will need to find a buyer.

It is easier to own gold stocks, which provide liquidity and security.

Final Take

If you are looking to invest in gold without the hassle of storing and protecting gold bullion, investing in gold stocks is an easy way to do it. While gold stocks tend to be a more stable investment than company stocks in some other industries, no investment is without risk.

FAQ

• Are gold stocks a good investment?

  • Because gold has held its value over time, it can be a good investment – and if you'd like the benefits of a stable investment without having to store and protect gold bullion, gold stocks are a good idea.

• What is the best gold stock?

  • Franco-Nevada is the largest publicly held gold mining company based on its market cap. However, any of the stocks on this list are popular investment choices.

  • If you are unsure of your best course of action, speak with a financial advisor who can help you make the right choices based on your risk tolerance, cash available to invest and the rest of your portfolio.

• Is it better to own gold or gold stocks?

  • Physical gold is more likely to hold a steady value over time, but it comes with the dilemma of storing and insuring it properly. Gold stocks, on the other hand, might see more fluctuation in price due to market ups and downs or other facets of the company, but they are easier to buy and sell and don't come with the cost of storing and insuring them.

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of March 6, 2023.

This article originally appeared on GOBankingRates.com: 7 Best Gold Stocks for 2023