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As Gold Rebounds, Look to These 3 Mining Stocks to Rally

As gold prices rebound, mining companies typically follow. They key is the find the right mining stocks for your portfolio. Three worth considering include Sibanye-Stillwater (SBSW), Eldorado Gold Corporation (EGO), and Seabridge Gold (SA).

Gold mining stocks have often been overlooked over the past few months as investors have had their eyes on high flying growth stocks. Even the headlines have gone to tech and other growth stocks, and sometimes rightfully so.

If you take a close look at publicly traded gold mining companies, and you are sure to find some worthy of your investing dollars. The difficulty is in sorting through the entirety of the sector to find the best of the best. Fret not; I have done the work on your behalf.

Let's take a look at three elite gold mining companies worth investing in right now: Sibanye-Stillwater (SBSW), Eldorado Gold Corporation (EGO), and Seabridge Gold (SA).

Sibanye-Stillwater (SBSW)

Though Sibanye-Stillwater was once known as Sibanye Gold Limited, the company mines more than gold. This precious metal miner has a diverse portfolio of precious metals, including platinum and palladium. Take a look at the POWR Ratings, and you will find SBSW has "A" grades in the Buy & Hold Grade, Peer Grade, and Trade Grade components. SBSW is ranked first out of 17 publicly traded stocks in the Miners - Diversified industry.

The analysts have set an average price target of $21.25 for the stock, indicating a potential 44% upside. SBSW also has a shockingly low forward P/E ratio of 7.32.

Though SBSW's long-term debt skyrocketed after the acquisition of Stillwater in 2017, the company is in the midst of a successful transformation, extending its mining operations from gold to platinum and other precious metals. In fact, about 90% of SBSW's EBITDA is tied to metals in the platinum group instead of gold. This mining company is well-diversified, meaning it is capable of enduring a dry spell with one particular metal or a dramatic stock decline.

Eldorado Gold Corporation (EGO)

Though investing in a gold mining company with mining operations in Brazil and Turkey might not seem like the most attractive place to park your money, it is certainly worth your consideration. The stock in question is EGO. EGO has nearly doubled in the past year. In short, if you are bullish on gold, you owe it to yourself to consider this mining company.

Check out EGO's POWR Ratings, and you will find an "A" grade in the Peer Grade component along with "B" grades in the Buy & Hold Grade and Trade Grade components. EGO is ranked #2 out of 30 stocks in the Miners - Gold category.

The average analyst price target for the stock is $16.05, indicating a potential upside of 21%. EGO is priced affordably, especially considering that it recently posted a year-over-year gold production increase of a whopping 50%, a huge feat for any mining company.

Seabridge Gold (SA)

This development stage business explores for, develops, and acquires mineral properties with a particular focus on gold. However, SA's operations also include the mining of silver, copper, and molybdenum.

The POWR Ratings show SA has an "A" grade in the Peer Grade component and a "B" in Buy & Hold Grade. SA is ranked 5th out of 30 stocks in the Miners - Gold industry.

Analysts are bullish on SA, having set an average price target of $59.52, indicating a potential 206.49% upside. Out of four analysts proving recommendations, all four have it as a "Strong Buy."  

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SBSW shares were trading at $14.91 per share on Tuesday afternoon, up $0.02 (+0.13%). Year-to-date, SBSW has gained 51.29%, versus a 16.64% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.


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