Stashing away cash under your mattress might feel like a secure way to build a retirement fund, but it’s far from effective. Idle money loses value over time due to inflation, which steadily erodes purchasing power. To protect and grow your wealth, simply saving isn’t enough — you need to invest it wisely.
One of the best ways to combat inflation is by putting your money to work in the stock market, particularly in assets that can deliver returns above the inflation rate. While gold is often seen as a go-to safe haven in uncertain times, investing directly in gold doesn’t offer the same liquidity and flexibility as stocks. That’s where a gold mining stock can offer a compelling alternative.
Also Read: Best long term Canadian stocks
Agnico Eagle Mines: A Gold-Backed Investment Option
Agnico Eagle Mines (TSX:AEM), headquartered in Toronto, is a gold exploration and production company with a market capitalization of $82.44 billion. It has long stood out as a top pick in Canada’s gold mining sector. Its merger with Kirkland Lake Gold significantly boosted its scale and competitiveness, positioning it as a formidable rival to industry leader Barrick Gold.
Recent financial results reflect the benefits of this strategic acquisition. In fiscal 2024, the company achieved record cash flow of $2.1 billion and anticipates doubling its earnings per share by year’s end. These strong financials have been mirrored in its stock performance, which has surged following the latest earnings report.
Rising gold prices have played a key role in boosting profitability for gold producers like Agnico Eagle. While gold prices can be volatile, current market conditions have worked in the company’s favor, enhancing its margins and overall outlook. With strong fundamentals and a favorable environment, Agnico Eagle appears well-positioned for continued growth.
Also Read: Investment strategies for Canadians
Final Thoughts
As of now, Agnico Eagle Mines shares trade at $163.99 and offer a quarterly dividend of US$0.40 per share, representing a 1.35% dividend yield. The stock has gained 38.90% year to date, outperforming Barrick Gold, which is up 26.21% over the same period.
AEM’s recent outperformance underscores its potential as a leading player in the sector. For investors looking to hedge against inflation with exposure to gold — while maintaining the convenience and liquidity of the stock market — Agnico Eagle Mines offers a compelling option.
Adding AEM stock to your self-directed investment portfolio can be a smart move to gain indirect exposure to gold, benefit from rising commodity prices, and shield your savings from inflation.
Sign Up For our Newsletters to get latest updates
