We recently published a list of Top 10 Gold Stocks with Dividends. In this article, we are going to take a look at where AngloGold Ashanti plc (NYSE:AU) stands against other top gold stocks with dividends.
Gold’s performance as an asset in 2024 has been immaculate, despite increasing global constraints. The price for it crossed the $2,900 per ounce mark, driven by strong purchasing by the central bank, increased investor demand, and its role as a hedge against economic uncertainties. Gold’s value as a safe haven increased due to inflationary concerns and increasing geopolitical instabilities, gaining interest from retail and institutional investors.
Total gold demand, including over-the-counter (OTC) investments, has reached a record high of 4,974 metric tons in 2024, as per the World Gold Council. This increase was majorly driven by central banks, which contributed over 1,000 metric tons of gold to the demand for the third consecutive year. Particularly central banks in emerging markets, such as China and India, looked to increase their gold reserves to diversify away from the U.S. dollar. Gold provided an astonishing return of 43.83% for the previous year, significantly above the broader market’s 20.89% gain for the same period.
The investment market for gold has seen major changes, where gold exchange-traded funds (ETFs) reported no major outflows for the first time since 2020, which marks a reversal from previous years of heavy liquidations. Moreover, physical demand for gold has been strong, with purchasing for bar and coins remaining stable at 1,186 metric tons. Technology-driven gold usage has also seen a surge of 7%, driven by the expansion of artificial intelligence and semiconductor industries. These industries rely on gold components for high-performance electronics.
Despite the overall strong performance of the market, gold jewelry demand saw a decrease of 11% in 2024 due to high prices, making it less affordable for consumers. Nevertheless, total spending on gold jewelry in monetary terms increased by 9%, highlighting the overall impact of increasing gold prices. The contrasting situation with lower demand for gold jewelry and high demand for investment highlights the changing role of gold in the global economy.
Market experts and top financial institutions hold a positive outlook on gold’s trajectory for 2025. Goldman Sachs has recently revised its forecast for the gold price to $3,100 per ounce, citing the enhancing accumulation by the central bank and increasing investor interest. Likewise, analysts from J.P. Morgan have projected that gold prices could increase to $3,000 per ounce if macroeconomic instability continues.
Looking ahead, the gold market is being influenced by global monetary policies as well. As per J.P Morgan, major economies like the U.S. and Europe looking to cut down interest rates and lower return on traditional investments will likely drive up the demand for gold. Historically, the opportunity cost of holding gold reduces as traditional investments produce lower yields, increasing prices.
Conclusively, under these circumstances, investment in gold stocks has become a lucrative opportunity for investors looking to gain from the metal’s performance while generating hefty returns through dividends. Gold mining companies with strong financial performance, continual dividends, and major hedge fund backing provide a golden opportunity to enter the sector.
Methodology
To come up with our list of the Best Gold Dividend Stocks to Buy Now, we first recognized companies in the gold sector, offering dividend payments, along with posing strong market capitalizations. We then shortlisted stocks by looking into hedge fund interest, as stocks with strong hedge fund backing often point to stable financials and growth potential.
To rank these stocks, we used Insider Monkey’s Hedge Fund Database as of Q4 2024. The companies were sorted on the basis of the number of hedge funds invested in them, ranking companies with the highest hedge fund interest in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A geologist working in the field, exploring for new mineral properties.
AngloGold Ashanti plc (NYSE:AU)
Number of Hedge Funds Holders: 31
AngloGold Ashanti plc (NYSE:AU) is one of the top gold mining companies with operations spanning across Africa, Australia, South America, and North America. The company’s key assets include its Geita mine in Tanzania.
The company produced strong financial results for the period ended December 31, 2024, reporting a cash flow of $942 million, a strong increase from $109 million in 2023, owing to efficient cost management and soaring gold prices. AngloGold Ashanti plc (NYSE:AU) reported an almost doubled adjusted EBITDA of $2.75 billion, benefiting from an increase of 24% in the average realized price of gold, year-on-year, now at $2,394 per ounce.
AngloGold Ashanti benefited from operational improvements across a number of key sites, including its Australian mines, which recovered from weather-related disruptions. This also includes the strengthening of its operations in Brazil, following the recommencement of concentrate processing at Queiroz. The company’s Obuasi mine in Ghana generated a strong free cash flow of $26 million.
Moreover, the company was able to further strengthen its portfolio by signing a $70.4 million deal to take over a majority stake in Matsa Resources’ Lake Carey gold project in Western Australia. The project potentially holds around 949,000 ounces of mineral resources, as well as 104,000 ounces of mineral reserves. This acquisition has strengthened the company’s asset base in a key mining area, furthering its expansion strategy.
Additionally, AngloGold Ashanti plc (NYSE:AU) has revised its dividend policy, reinforcing its commitment to shareholder returns. The company announced an interim dividend of $0.69 cents for the latter half of 2024, increasing the accumulated annual payout to 91 cents per share. The company is targeting a payout of 50% of its free cash flow, with a base dividend of $0.50 per share annually, under its new policy. This policy ascertains stable returns to investors while preserving financial flexibility.
Under these positive changes, the share price for AngloGold Ashanti plc (NYSE:AU) has increased by 45.31%, year-on-year, demonstrating investor confidence in the company’s strategic expansion and financial stability. Thus, the company remains an attractive investing opportunity for investors looking for growth and income, as it optimizes costs and focuses on expansion to remain a top choice among the best gold stocks offering dividends.
Overall, AU ranks 10th on our list of other top gold stocks with dividends. While we acknowledge the potential of AU, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.