Joel Anderson of highlights three fundamentally strong gold mining companies whose stocks are likely to ride out the ups and downs of the gold market and maintain profitability in the long term.

Speculating on gold prices seems to be the folly of every trader and pundit these days. On the one hand, it’s a fairly simple case of supply and demand. On the other, precisely what drives that demand is not so clear. As such, it seems as though investing in gold mining stocks, an industry that relies heavily on the fickle cost of gold, would not be a wise investment.

However, there are some gold mining companies that have the sort of size and structure to make them potentially promising investments. Companies with strong margins and solid growth projections might have the sort of strong business base to ride out the ups and downs of the gold market and maintain profitability in the long term.

What’s more, according to, the remaining gold left on the Earth is only 40% of what’s currently above ground. This being the case, it’s not unreasonable to believe that, over a long enough period of time, global demand for gold will begin to increasingly outpace supply, resulting in higher prices.

Even if this is the case, gold prices will most likely continue to be subject to any number of short-term fluctuations, but there’s still ample reason to expect prices to trend upwards in the long term.

See related: Risky Gold Stock Has Big Upside Target

So, here are three gold mining stocks that appear to have the sort of growth projections, margins, and valuations to sustain themselves through good gold markets and bad. Each of these three companies has projected earnings per share (EPS) growth of 35% annually over the next five years, have operating margins over 30%, have profit margins over 20%, and price/earnings to growth (PEG) ratios under one.

All told, these sorts of bullish valuations and projections could point towards companies that are poised to profit in the short term, thrive in the long term, and ride out the ups and downs in the meantime. While there’s no guarantee that these companies will find the profits they expect, they could still have the potential to be strong investments.

Toronto, Ontario-based Barrick Gold Corp. (ABX) is the world’s largest gold producer, with operating gold mines in North America, South America, and the Australia Pacific region. It also holds a 73.9% interest in African Barrick Gold, which operates gold interests in Africa.


Click to Enlarge

Randgold Resources (GOLD) is a Jersey-based company with gold operations primarily in Mali as well as other locations in West and Central Africa.


Click to Enlarge

AngloGold Ashanti Limited (AU) is a South African gold-mining company with 20 operations in ten countries across four continents.


Click to Enlarge

By Joel Anderson, contributor,

Related Articles
  1. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  2. Stock Analysis

    3 Stocks that Are Top Bets for Retirement

    These three stocks are resilient, fundamentally sound and also pay generous dividends.
  3. Investing News

    Are Stocks Cheap Now? Nope. And Here's Why

    Are stocks cheap right now? Be wary of those who are telling you what you want to hear. Here's why.
  4. Investing News

    4 Value Stocks Worth Your Immediate Attention

    Here are four stocks that offer good value and will likely outperform the majority of stocks throughout the broader market over the next several years.
  5. Investing News

    These 3 High-Quality Stocks Are Dividend Royalty

    Here are three resilient, dividend-paying companies that may mitigate some worry in an uncertain investing environment.
  6. Stock Analysis

    An Auto Stock Alternative to Ford and GM

    If you're not sure where Ford and General Motors are going, you might want to look at this auto investment option instead.
  7. Stock Analysis

    The 6 Biggest Russian Energy Companies

    Learn about the top energy companies in Russia, a country that holds some of the largest reserves of oil, natural gas and coal in the world.
  8. Mutual Funds & ETFs

    The 4 Best Buy-and-Hold ETFs

    Explore detailed analyses of the top buy-and-hold exchange traded funds, and learn about their characteristics, statistics and suitability.
  9. Stock Analysis

    The Biggest Oil Producers in Asia

    Learn which Asian countries deliver the most crude oil to market, and discover what companies are the biggest producers in each country.
  10. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!