Merely setting apart some cash every month and hiding it below your mattress may appear to be a protected method to save to your retirement nest egg. Nevertheless, any cash that you simply go away idle merely can’t retain its worth, not to mention develop extra worthwhile over time. Why? Inflation will deteriorate the worth of that cash.
Persistently rising client costs can erode the worth of all of the hard-earned financial savings. Nevertheless, investing your cash in the suitable areas inside the inventory market could be the reply to the inflation drawback. As a substitute of letting your cash sit idly, you possibly can put it to work available in the market, allocating it to property that may ship inflation-beating returns.
When pondering of safe-haven property, individuals sometimes consider gold. At this time, I’ll focus on a inventory you possibly can contemplate if you’re bullish on gold however need the flexibleness and ease of liquidity of inventory market investing as you hedge your bets.
Agnico Eagle Mines
Agnico Eagle Mines (TSX:AEM) is a Toronto-headquartered, $82.44 billion market capitalization firm that engages in gold exploration and manufacturing. The corporate has lengthy been a high choose of mine within the Canadian gold mining trade, and for good purpose. The corporate’s acquisition of Kirkland Lake allowed Agnico Eagle to turn out to be a major competitor to Barrick Gold, which has been dominating the trade for some time.
The corporate’s latest financials mirror the advance in its efficiency after the acquisition, and a take a look at the chart above additionally reveals it. The latest uptick in AEM inventory share costs is available in after the corporate’s financials painted a fairly image for fiscal 2024. The corporate posted $2.1 billion in money movement, a brand new document for itself. The corporate expects its earnings per share this yr to double from 2024.
Rising gold costs have been a serious enhance to gold mining corporations like Agnico Eagle. The upper the worth of gold, the higher the margins for gold-producing corporations. That stated, the worth of gold tends to fluctuate loads, and there’s solely a lot an organization can leverage rising gold costs. For now, Agnico Eagle Mines appears to be like well-positioned to stay a high participant within the trade.
Silly takeaway
As of this writing, Agnico Eagle Mines inventory trades for $163.99 per share and pays its shareholders US$0.40 per share each quarter, translating to a 1.35% dividend yield. Up by 38.90% yr so far, it has proven a formidable efficiency on the inventory market in the previous few months. In the identical interval, Barrick Gold is up by 26.21%.
The efficiency of AEM inventory in comparison with Barrick reveals it has the potential to outperform different gamers within the sector. If you wish to hedge in opposition to inflation, publicity to a safe-haven asset like gold could be a superb play.
By investing in a gold-producing firm’s shares within the inventory market, you possibly can leverage rising gold costs whereas having fun with the flexibleness of inventory market investing. To this finish, AEM inventory could be a superb holding to think about to your self-directed funding portfolio.
