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2 Top Canadian Gold Stocks to Buy if Uncertainty Picks Up

Published 2022-03-24, 03:33 p/m
Updated 2022-03-24, 03:45 p/m
© Reuters. 2 Top Canadian Gold Stocks to Buy if Uncertainty Picks Up

© Reuters. 2 Top Canadian Gold Stocks to Buy if Uncertainty Picks Up

Gold is well known to be one of the best assets to buy if you want to protect your capital. The precious metal is referred to as a safe-haven asset. So often, in times of war, as we are seeing now, the demand for gold bullion as well as top Canadian gold stocks increases considerably as investors look to protect their cash.

In recent years many thought that Bitcoin (CRYPTO:BTC) might replace gold. And while gold was always looked at as a hedge against inflation, in the same way that Bitcoin has been looked at, the cryptocurrency doesn’t perform as well as gold during risk-off environments.

The strong performance in the price of gold recently has made a noticeable point in proving that Bitcoin hasn’t replaced gold and that the precious metal still offers value as a safe-haven asset.

So if you’re looking to protect your capital, here are two top Canadian gold stocks to buy if uncertainty continues to increase.

One of the top low-cost gold stocks to buy now Whenever you buy a mining stock, whether it’s a gold company or an energy company, the lowest-cost producers are typically the best to buy. That’s why if you’re considering adding a gold stock to your portfolio, B2Gold (TSX:TSX:BTO)(NYSEMKT:BTG) is a top choice.

By having low costs, B2Gold can see more profitability when prices are rising. Furthermore, it can remain profitable for longer than its peers when prices are falling. This gives it a tonne of advantages and makes it one of the top gold stocks to buy for the long haul.

Plus, in addition to the fact that B2Gold is one of the lowest-cost producers in the industry, it’s also well-diversified, has negative net debt, and pays one of the best dividends of all its Canadian gold mining peers.

So if you’re looking for a gold stock to buy that can help protect your portfolio from uncertainty, right now, B2Gold trades at a forward enterprise value (EV) to EBITDA ratio of just 4.4 times and offers a yield that’s upwards of 3.5%.

A top Canadian gold stock with major growth potential Another high-quality gold stock to consider, especially if you’re looking for a company that can offer attractive growth over the coming years, is Equinox Gold (TSX:TSX:EQX)(NYSEMKT:EQX).

Because Equinox is a new gold stock and one that’s been rapidly ramping up its production, in this environment, it could be one of the top gold stocks to buy.

Any time a gold stock is increasing production, it stands to increase its sales and net income considerably, meaning more upside potential in the share price. However, when the price of gold is simultaneously increasing, the potential for increased profits is that much greater.

Already in just the last two years, Equinox has seen its revenue grow from $281 million in 2019 to more than $1 billion in 2021. In addition, it’s seen its operating income increase from approximately $50 million in 2019 to roughly $150 million in 2021, showing the potential Equinox has as it ramps up production.

So with gold prices having a strong tailwind and gold one of the top assets to gain exposure to in this environment, you may want to consider adding exposure to gold stocks today.

And if you are looking to protect your portfolio, a growth stock like Equinox that can rally rapidly as prices increase makes it one of the top gold stocks to buy now.

The post 2 Top Canadian Gold Stocks to Buy if Uncertainty Picks Up appeared first on The Motley Fool Canada.

Fool contributor Daniel Da Costa owns B2GOLD CORP. and Bitcoin. The Motley Fool owns and recommends Bitcoin. The Motley Fool recommends B2Gold.

This Article Was First Published on The Motley Fool

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