The Best Gold Stock for Defense Mode Investors
Written by Amy Legat-Wolfe at The Motley Fool Canada
Motley Fool investors are probably already aware that when a market downturn occurs, the market turns to commodities. These are elements without which we cannot live. And one of those items tends to be gold.
While Warren Buffett doesn’t like gold stocks, the market does. But there are still plenty of choices for solid growth in a downturn, or perhaps even a recession.
So if that happened, some Motley Fool investors would likely be on the defensive. If so, this is the best gold stock I would choose today.
Wheaton Precious Metals
Wheaton Precious Metals (TSX:WPM)(NYSE: WPM) is a streaming company. This means that he usually gives seed money to small mines that need it. Then Wheaton can step in and buy gold at cost when he strike gold.
The company then sells its minerals in Canada and around the world. It has 23 mines in operation and 13 in development, at the time of writing. And while it definitely dabbles in gold, it also supports mining everything from silver and copper to palladium.
Very cheap
What you should love about Wheaton right now is that the gold stock offers strong value. It trades at a book value of 2.95 times and a fair value of 23 times earnings. Additionally, you can get a stable dividend yield of 1.41% at the time of writing.
And what is important is to look back on the company’s performance during the last stock market crash. In fact, over the past few years. In the case of 2020, when the market fell in March, Wheaton shares began to soar. And then it was because of the pandemic, not a recession.
Now that we can reach a recession, stocks should rise again. In 2020, it was 89%! And it could certainly happen again, with the company’s shares returning to all-time highs.
Be on the defensive
Commodities are a great way to protect your portfolio during a downturn. But instead of choosing a gold stock that focuses on its own mining projects, Wheaton gives you access to projects around the world. Moreover, he simply continues to make investments. There is no cost to purchase land, equipment or anything else. Wheaton just happens to rush, hand over, and collect gold and silver at discounted prices.
So if you’re looking for a way to be defensive, I would highly recommend Wheaton today. You can recoup the gold stock and expect consistent long-term contracts and solid growth for years to come. But even if you just decide to stick to all-time highs, it could very well happen over the next year and even months.
The post office The Best Gold Stock for Defense Mode Investors appeared first on Motley Fool Canada.
Before you consider Wheaton Precious Metals Corp., we think you’ll want to hear this.
Our Stock Advisor Canada team has just released its top 10 starting stocks for 2022 that we think could energize any portfolio.
Want to see if Wheaton Precious Metals Corp. is on our list? Get started with Stock Advisor Canada today to receive our top 10 stocks, a comprehensive treasure trove of industry reports, two new stock recommendations every month and much more.
See the 10 Actions * Returns from 04/14/22
More reading
Dumb Contributor Amy Legat-Wolfe has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned.
2022