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The price of bitcoin went from $400 to nearly $1,300 in just a year, surpassing the price of gold.
However, bitcoin euphoria wore off and bitcoin prices fell 30% in March. Bitcoin continues to face some big headwinds. Three of China’s largest bitcoin exchanges halted bitcoin withdrawals in February. China regulators seek to cut down on the role of digital currency in criminal activities.
Meanwhile, in the U.S., the SEC rejected a proposal for a bitcoin-based exchange-traded fund (ETF).
Now the attention is back on gold as the traditional safe investment. Gold has remained resilient in 2017. The price of gold is now back over $1,250 an ounce, while bitcoin hovers around $1,200.
But as Warren Buffett has said, gold (the yellow metal) by itself is a useless investment. Rather, the better play is to find companies that actually “do something,” and produce goods or services. We’ve found the double whammy: gold producers that source gold and also pay a dividend.
Gold remains a “flight to safety” investment, as it It has been for centuries. With the market at all-time highs and uncertainty on the rise, it might be time for investors to consider gold and gold stocks again.
Here are top three gold stocks that are better than bitcoin:
Randgold Resources (NASDAQ: GOLD)
Randgold pays perhaps the best dividend in the industry, yielding 1.1%. It’s also one of the only gold companies to maintain a double-digit operating margin over the last decade. It’s been a resilient gold producer regardless of the price of gold.
Plus, it has the best balance sheet among the major gold miners. Couple that with the fact that it’s trading as one of the cheapest gold miners around, and you have what looks to be one of the top investments in the gold industry. Randgold’s return on assets is nearly 7%. Most of its gold-producing peers are generating a return on assets of just 2% to 3%.
Barrick Gold (NYSE: ABX)
Barrick Gold is the solid free-cash-flow generator in the industry, using its free cash flow to reduce debt and support its 0.6% dividend yield. The company recently increased its dividend by 50%.
Barrick hit a new record for free cash flow last year, bringing in $1.5 billion.. Last year, the company also improved its balance sheet nicely with a $2 billion reduction in debt. This gold miner’s all-in cost is just around $800 an ounce, meaning it will remain profitable even if gold prices fall off a cliff in 2017.
Goldcorp (NYSE: GG)
Goldcorp shares were trading above $17 in mid-February, stumbled to $14 in March and have now consolidated around $15. The gold producer, extractor and processor is headquartered in British Columbia. Goldcorp recently said it will team with Barrick on a gold-copper extraction project in Chile.
The company is known as one of the most efficient gold producers in the industry. In the most recent quarter, Goldcorp managed to reduce its all-in cost of gold production to just $750 an ounce, versus the $860 an ounce for 2016. For the longer term, the goal is to get the all-in cost down to $700 an ounce by 2020 and to raise its gold production totals with joint ventures and other initiatives.
The three gold companies above pay the best dividends in the industry and look to be great ways to invest in an uncertain market.