Yahoo Finance Cameco vs. Barrick Gold: 2 Undervalued Mining Stocks Set to Unearth Gains
Written by Joey Frenette at The Motley Fool Canada
There’s a lot of value to unearth in Canada’s mining scene, especially after the latest pullback in various names that, prior to their declines, have rallied considerably on the back of various industry headwinds. Indeed, commodity prices fluctuate, sometimes wildly, and in both directions.
As an investor in the producers or the commodity futures, such rampant volatility has to be dealt with. Indeed, commodity investing isn’t everyone’s cup of tea. However, for those with strong stomachs, I think that betting on the well-run, decently valued miners can help boost your portfolio while providing a great deal of diversification.
Undoubtedly, introducing volatility to a portfolio is only worthwhile if you’re able to increase your shot at lowly correlated gains. Further, the commodity plays tend to swing wildly in both directions, making it opportunistic to be a net buyer following any massive downswing.
Of course, it’s hard to time bottoms, but for the long-term thinkers willing to invest for the longer run (think 10-20 years at a time), buying such plunges can be quite rewarding.
In this piece, we’ll examine two of my favourite Canadian mining companies: uranium producer Cameco (TSX:CCO) and Barrick Gold (TSX:ABX). As we approach the start of the second half, let’s find out which is the better long-term bet.
Cameco
Cameco makes a strong case for why it should be the first commodity producer you look to for long-term growth. Indeed, the return of nuclear power could provide a huge tailwind that could last many years, if not indefinitely. Undoubtedly, nuclear energy is clean and as technologies (think artificial intelligence) advance, the risk and odds of nuclear incidents may very well decrease over time.
Of course, just because sentiment in nuclear power is increasing again doesn’t mean there won’t be another period of hesitancy over the power source. In any case, I think things are looking up for nuclear power. And to fuel the modern nuclear reactions being constructed, Cameco will need to do its part to produce more uranium.
As a top-tier miner with the wind at its back, I wouldn’t dare bet against the firm after its 426% surge in the last five years. If the nuclear renaissance continues into 2030, perhaps similar gains could be in the cards.
Barrick Gold
For investors who are looking to do some serious hedging, perhaps Barrick Gold is a shinier bet to make it through today’s uncertain market waters. While the tech sector is blasting off, with investors more than willing to speculate on meme stocks, questions linger as to how the enthusiasm will end.
I have no idea, but the recent pick-up in demand for gold, especially among young people (think millennials), bodes well for the future of the shiny yellow metal.
With gold recently pulling back a bit off its peak, I think the miners represent a great value, especially Barrick stock, which pays a 2.43% dividend yield for investors to wait while gold looks to resume its run after the latest cooldown. Though I wouldn’t back up the truck here, I would seriously consider a starter position after the latest 11% plunge off 52-week highs.
The post Cameco vs. Barrick Gold: 2 Undervalued Mining Stocks Set to Unearth Gains appeared first on The Motley Fool Canada.
Should you invest $1,000 in Barrick Gold right now?
Before you buy stock in Barrick Gold, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Barrick Gold wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.
Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,363.76!*
Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 26 percentage points since 2013*.
See the 10 stocks * Returns as of 6/3/24
More reading
Can You Guess the 10 Most Popular Canadian Stocks? (If You Own Them, You Might Be Losing Out.)
How to Build a Bulletproof Monthly Passive-Income Portfolio in 2024 With Just $25,000
Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Cameco. The Motley Fool has a disclosure policy.
2024
