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Even if you’ve never considered adding precious metals to your portfolio, there are compelling reasons to consider owning precious metals or precious metals stocks in 2024.
The economy continues to show what could be called “headline health.” On the surface, things are trending in the right direction. The rate of inflation is trending towards the Federal Reserve’s preferred 2% target. The consumer continues to spend. And that is perhaps due to employment remaining stable.
But below the surface, corporate layoffs are accelerating. And that consumer spending appears to be funded, in part, by credit that can’t be sustainable.
I’m not in the prediction game when it comes to the broader economy. However, I am interested in helping investors profit regardless of what happens in the economy. Right now, putting a portion of your portfolio into precious metals seems like a sound idea. And if you don’t want to own, and store, physical metal, precious metals stocks are a good alternative.
Based on future growth expectations, here are three of the best precious metals stocks in 2024.
Barrick Gold (GOLD)
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Barrick Gold (NYSE:GOLD) is one of the popular large cap names among precious metals stock. The mining company gave investors a preview of its fourth quarter financials by announcing it increased its gold production in the fourth quarter and the production number was the highest number posted by the company this year.
However, investors weren’t impressed. The stock is down 13% in the month ending January 30, 2024 with most of that loss coming after Barrick’s announcement. But the stock seems to be finding support around $15.25. And the consensus $21.63 price target is 37% higher than its price as of this writing.
If it does, this may turn out to be a fortuitous dip in GOLD stock prior to Barrick Gold delivering earnings in February. Out of 23 analysts that have offered a rating, 16 give the stock a Strong Buy or Buy rating.
GOLD stock is currently trading at a forward P/E ratio of 19.82. That’s above both its projected median P/E ratio of around 13.9x in the next five years. It’s also well above the mining sector average of 7.8x. Although you’re paying a premium for the stock, it may be well worth it.
Hudbay Minerals (HBM)
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With a 1.99 billion market cap, Hudbay Minerals (NYSE:HBM) falls just shy of being a mid-cap stock. But if the growth outlook is correct, that should come in short order. That anticipated growth is why it belongs on this list of precious metals stocks in 2024.
Analysts are forecasting 318% earnings growth in the next 12 months. The bullish outlook is based on the company’s leadership in mining for copper which accounts for approximately 50% of its revenue. Gold comes in at around 22% with zinc and silver making up the remainder. Copper is expected to remain in demand as the world continues to pivot towards renewable energy, including but not limited to electric vehicles.
A forward P/E ratio of 35x means you’ll be paying a premium for HBM stock. Nevertheless, after a year of being range bound, analysts predict a 30% increase in the company’s stock price and 12 out of 14 analysts give the stock either a Strong Buy or Buy rating. Some of the outlook is based on the company’s financial discipline.
If you’re looking to take a position in HBM stock, the stock appreciation is what you’ll have to rely on. As a dividend stock, Hudbay Minerals isn’t too exciting.
Endeavour Silver (EXK)
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Endeavour Silver (NYSE:EXK) is my last pick for precious metal stocks in 2024. This is a small-cap stock with a market cap of $338.8 million. And with a beta value of over 1.6, the stock is likely to provide volatility that may be uncomfortable for many investors. But if you have a speculative disposition, and capital that you can afford to park, Endeavour Silver makes an intriguing case.
First, the bad news. Despite consistent revenue and earnings in 2023, EXK stock is down 54% in the last 12 months. This likely has more to do with the general malaise that is over all small-cap stocks, and not a situation unique to Endeavour.
Now the good news. The company is expecting revenue to get a solid boost from its Terronera mine which is supposed to begin mining operation in the fourth quarter of 2024.
Four out of five analysts give EXK stock a Strong Buy rating with a consensus price target that is 179.5% higher than the closing price on January 30, 2024.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.