The shine has come off gold stocks. After starting the year on a tear, they plummeted in recent weeks, along with the price of the precious metal. The primary reason is the concern that inflation is rising along with the costs of oil and this could lead the U.S. Treasury to raise interest rates in an effort to curb that inflation.
The price of gold tends to decline during periods of inflation. Gold doesn’t pay dividends or earn interest, so when inflation stays high, central banks, such as the U.S. Federal Reserve, often raise interest rates to slow the economy. Conversely, as interest rates increase, Treasury bonds and high-yield saving accounts, with their guaranteed returns, can become more attractive than gold.
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Newmont (NYSE: NEM) is down more than 4% so far this year and more than 21% in the past month. Shares of Barrick Mining (NYSE: B) have been hit even harder, dropping more than 22% this month and more than 14% so far this year. The downward swing presents patient investors with an opportunity to buy two quality gold stocks on the dip.
Here are three reasons why I like these stocks.
Denver-based Newmont is the largest gold-producing company in the world but also mines substantial amounts of silver, copper, lead, and zinc. It has 12 Tier-1 operations across eight countries.
In 2025, it reported earnings per share (EPS) of $6.39, up 123%, and free cash flow of $7.3 billion, an increase of 150%. These results allowed the company to trim its debt by $3.4 billion, leaving it with $2.1 billion in cash.
In the fourth quarter, the company’s average realized price for gold was $4,216 per ounce, while its all-in sustaining cost (AISC) was only $1,302. The latter figure is expected to rise if oil prices remain elevated, but gold’s current price is still above $4,500, leaving ample room for further gains.
Barrick, based in Toronto, is the No. 2 gold-producing company in the world, operating 10 mines across 17 countries. In 2025, its free cash flow was $3.87 billion, up 194%, and its EPS was $2.93, a rise of 140%. The company repurchased $1.5 billion of its shares in 2025. In the fourth quarter, its average realized price for gold was $4,177, and its AISC was $1,581.
Newmont raised its dividend this year by 4% to $0.26 per share, yielding around 1.05% at its current share price. While it has occasionally cut its dividend, it has paid one for 38 consecutive years, and the current payout ratio is just 15.6%.
finance.yahoo.com
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