The yellow metal, popular as an inflation hedge, has slumped this year due to the ensuing aggressive rate hikes. Gold has underperformed its rival asset, the dollar. And now the market awaits another anticipated 75 basis point rate hike.
However, ahead of a pivotal FOMC decision, investors are optimistic that the Fed’s monetary policy tightening might come to an end in the near term, as the economic slowdown could bring down prices. Hence, gold could stabilize above the $1,700 level if an additional 75 basis points hike is not signaled for September.
With the monetary policy shifts and geopolitical volatility, the precious metal might find some support as a hedge. Hence, the fundamentally strong gold miner stocks Centerra Gold Inc. (CGAU) and B2Gold Corp. (BTG) might be solid investments.
Centerra Gold Inc. (CGAU)
CGAU operates as a gold mining company that acquires, explores, and develops gold and copper properties in North America and globally. The company’s principal project includes the 100% owned Mount Milligan gold-copper mine, located in British Columbia. It is headquartered in Toronto, Canada.
On May 4, CGAU announced a quarterly dividend of CAD0.07 per common share, which was payable to shareholders on June 1. This reflects the company’s ability to pay back its shareholders.
On April 20, Kootenay Resources Inc. announced the signing of an option agreement with a CGAU subsidiary whereby the company was granted an option to earn 70% interest in the Copley property located in the Nechako Plateau of Central British Columbia. This might expand the operative capacity of the company.
For the fiscal first quarter that ended March 31, CGAU’s revenue increased 30.5% year-over-year to $295.22 million. Adjusted net earnings from continuing operations and adjusted net earnings from continuing operations per common share came in at $56.40 million and $0.19, up 100% and 90% from the prior-year quarter.
The consensus EPS estimate of $0.79 for the fiscal year 2022 indicates a 2.6% year-over-year increase. Likewise, the consensus revenue estimate for the same year of $1.15 billion reflects a rise of 27.6% from the prior year.
The stock has gained marginally over the past five days to close its last trading session at $6.00.
CGAU’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
CGAU has a Quality grade of A and a Growth and Value grade of B. In the 33-stock Miners – Gold industry, it is ranked #1. Click here to see the additional POWR Ratings for CGAU (Momentum, Stability, and Sentiment).
B2Gold Corp. (BTG)
BTG, based in Vancouver, Canada, is a gold producer primarily operating in three mines in Mali, the Philippines, and Namibia. The company also holds interests in Calibre Mining Corp. and BeMetals Corp.
On June 8, BTG declared a second-quarter dividend of $0.04 per common share, which was payable to shareholders on June 29. This reflects upon the company’s cash generation and shareholder return ability.
On May 26, BTG announced that it had entered into a definitive Scheme Implementation Agreement with Oklo Resources Limited to acquire 100% of the fully paid ordinary shares of Oklo. The acquisition is expected to provide BTG with landholding in greenstone belts in Mali, West Africa, which include Oklo’s flagship Dandoko Project.
BTG’s gold revenue increased 0.9% year-over-year to $365.58 million in the fiscal first quarter that ended March 31. Cash and cash equivalents balance rose 26.6% from the prior-year period to $648.76 million. Net income for the period and EPS stood at $90.80 million and $0.08, respectively.
Street EPS estimate for the fiscal year 2022 of $0.37 indicates a 2.8% year-over-year improvement. Likewise, Street revenue estimate of $1.85 billion for the same year reflects a rise of 4.7% from the prior year.
BTG’s stock has gained 3.3% over the past five days and 2.5% intraday to close its last trading session at $3.31.
It’s no surprise that BTG has an overall B rating, which translates to Buy in our POWR Ratings.
BTG has a B grade for Sentiment and Quality. It is ranked #4 in the Miners – Gold industry. Click here to see the additional POWR Ratings for Growth, Value, Momentum, and Stability for BTG.
CGAU shares were trading at $6.04 per share on Wednesday afternoon, up $0.04 (+0.67%). Year-to-date, CGAU has declined -20.40%, versus a -16.00% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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