Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 Metals and Mining Stocks to Buy for 2022

Stock MarketsOct 22, 2021 15:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2 Metals and Mining Stocks to Buy for 2022

Metals and mining stocks have underperformed the broader market, and many appear oversold at current prices.

Newmont Newmont (TSX:NGT)(NYSE:NEM) is the world’s largest gold producer. The company also produces copper, silver, zinc, and lead. The merger of Newmont and Goldcorp a few years ago created a mining giant that is positioned well to benefit from high gold prices.

Newmont reported decent Q2 2021 results and continues to return cash to shareholders. The company repurchased US$149 million worth of shares in the quarter as part of a US$1 billion share-repurchase program. Newmont also paid a US$0.55 dividend in the three-month period.

The balance sheet is in good shape with US$4.6 billion in cash and US$7.6 billion in liquidity as of June 30. Growth continues to come from strategic acquisitions and the development of new mines. Newmont completed its purchase of GT Gold in May and gave the green light to its Ahafo North project in July. The mine is expected to generate an internal rate of return of more than 30% at current gold prices.

Gold sells for US$1,780 per ounce at the time of writing. Newmont reported all-in sustaining costs of US$1,035 per ounce in the quarter, so the company is making good margins in the current environment. Free cash flow was US$578 million in the quarter compared to US$388 million in the same period last year.

The Q4 results should also be solid when they come out next week.

The stock trades near $70 per share on the TSX right now compared to the 2020 high around $95. The pullback appears overdone given the profitability and the stable production outlook. Newmont is targeting average annual gold production of 6.5 to seven million ounces per year through 2025.

Assuming gold holds it current price or moves higher in the next few years, the stock appears oversold today.

Kinross Gold Kinross (TSX:K)(NYSE:KGC) has trended higher in the past month after a steady decline through most of 2021. At the current share price of $7.75 the stock is down about 24% this year.

Kinross had a fire at the mill of its Tasiast site this summer, and that has put the operation out of service while the company makes the required repairs. The facility is expected to be up and running in Q4 2021.

Kinross has a strong development pipeline on the go that will increase production significantly in the next couple of years, as two major projects are completed. Despite the setback this summer, Kinross still expects production to grow from a revised 2.1 million ounces in 2021 to 2.7 million ounces in 2022 and 2.9 million ounces in 2023.

Kinross put a share-buyback program in place in recent months that will see the company repurchase up to 5% of the outstanding common stock over a 12-month period. Kinross also pays a quarterly dividend of US$0.03 per share. That’s good for an annualized yield of about 2%.

The company has a strong balance sheet and is generating strong free cash flow at current gold prices.

Given the production growth outlook the stock appears undervalued right now.

The bottom line on cheap mining stocks Newmont and Kinross appear cheap today, even if gold maintains its current price through 2022. If you are a gold bull and have a contrarian investing style, these stocks deserve to be on your buy list.

The post 2 Metals and Mining Stocks to Buy for 2022 appeared first on The Motley Fool Canada.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Andrew Walker has no position in any stock mentioned.

This Article Was First Published on The Motley Fool

2 Metals and Mining Stocks to Buy for 2022
 

Related Articles

Is Lightspeed (TSX:LSPD) Stock Price Still a Buy?
Is Lightspeed (TSX:LSPD) Stock Price Still a Buy? By The Motley Fool - Dec 05, 2021

Lightspeed Commerce (TSX:TSX:LSPD)(NYSE:LSPD) stock has been in a downward spiral for months. Currently trading for $64, it’s down 59% from its all-time high. The...

Could This Retail Stock Become a Tech Stock?
Could This Retail Stock Become a Tech Stock? By The Motley Fool - Dec 05, 2021

The line between retail and technology has been blurring for years. Nearly everything you can buy in a store is now also available online on the store’s website. This is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email