What Is DSCR and How To Calculate It?

A debt-service coverage ratio (DSCR) is a financial metric that analyzes an entity’s ability to pay its debt. The basic formula to calculate the DSCR is:

DSCR = Net Operating Income / Debt Obligation 

A DSCR of 1.0 reveals that a borrower has just enough cash flow to pay off its debt obligations. A DSCR of greater than 1.0 shows that a borrower has more than enough cash flow to repay their debt. And, a DSCR of less than 1.0 shows that a borrower does not have enough cash flow to repay their debt. Lenders will examine the DSCR when determining whether or not to approve a loan. DSCR loans are based almost entirely on the DSCR.

With that in mind, let’s examine the two most common scenarios where DSCR loans are used: real estate investing and business. 

Real Estate DSCR Loan

DSCR loans are common in the real estate industry as they can help investors qualify for loans without relying on their personal income. Traditional mortgages require borrowers to disclose personal financial information like pay stubs, employment history, and W-2 tax returns. However, DSCR loans don’t ask for any of this. Instead, lenders issue DSCR loans based on the projected profitability of the deal.

Real estate DSCR loans follow this formula:

DSCR = Net Operating Income / Debt Obligation 

In this example, “net operating income” is the projected revenue from a real estate rental, and “debt obligations” are all of the costs associated with owning that property (mortgage payment, taxes, upkeep, HOA fees, etc).

For example, let’s say you want to buy a rental property and project that this investment will generate $5,000 per month or $60,000 annually in rental cash flow. If your debt obligations from the property are $50,000 annually then your DSCR is:

$60,000 / $50,000 = 1.2

A DSCR of 1.2 tells the lender that your property should generate enough cash to cover all expenses. Most real estate lenders consider a DSCR of 1.2 or greater to be acceptable and will likely approve a loan if you can prove this metric. However, lenders may still have other requirements like a good credit score or a minimum loan amount. 

To get a better idea of why lenders use this metric, it’s helpful to think of the opposite scenario. Imagine that you’re a real estate investor who is applying for a DSCR loan. Your projected revenue is $60,000 annually. But, your debt obligations will be $80,000. This means that your DSCR will be 0.75% ($60,000 / $80,000 = .75%). In other words, your property will not generate enough cash flow to pay the property’s mortgage and expenses. In this scenario, lenders will not want to lend you money as you’ll have a tough time being able to repay it. If this is the case, you may want to reexamine your calculations and maybe even the deal itself. 

DSCR loans are not reserved for real estate investors. They can also be used in the business world.

Business DSCR Loan

A DSCR loan can also measure how much cash flow a business has to generate in order to repay the required principal and interest on a loan during a given period. Calculating the DSCR ratio for a business loan is a bit trickier than for real estate loans. It starts with the same basic formula: 

DSCR = Net Operating Income / Debt Obligation 

But, in this scenario, “net operating income” is a company’s revenue minus operating expenses not including taxes and interest payments. “Debt obligations” refers to all short-term debt, interest, principal, sinking fund, and lease payments that are due in the coming year.

For example, if your company’s net operating income is $1,000,000 annually and your total debt is $250,000 then your DSCR would be 4. This means your business has 4 times the amount of cash it needs to cover its current debt obligations. 

Lending requirements are a bit more complex when it comes to business DSCR loans. However, lenders will still view your DSCR as an indicator of loan risk. Businesses with a lower DSCR are considered riskier than those with a higher DSCR. Having a low DSCR could impact your company’s ability to raise money or force you to take on debt with less favorable terms.

Pros and Cons

Since they have less strict requirements, DSCR loans can make it easier to raise capital for your business or an investment project. For example, it can be easier to buy a rental property using a DSCR loan since the loan is based on the profitability of the project – not your personal income.

Pros:

• Easier to get approved: A DSCR loan can be an easy way to raise capital for both real estate investors and businesses in good financial standing. There are usually fewer hoops to jump through when compared to other forms of financing.
• Financial forecasting: The DSCR metric can also be beneficial for companies and investors as a way of analyzing their financial health. Consistently monitoring your DSCR will let you know if your ability to repay debt is improving, getting worse, or staying the same over time.

For some investors, the concept of a DSCR loan may sound too good to be true as it allows you to qualify for a loan without having a high income. However, there are a few downsides to this form of financing.

Cons:

• Less favorable terms: DSCR loans often come with less favorable terms, such as a higher interest rate or shorter repayment schedule. 
• Higher fees: This form of financing may charge origination fees and other fees that can increase your cost of borrowing.
• Fewer protections: DSCR loans are less popular than other forms of financing, which means there tend to be fewer protections in place.

I hope that you’ve found this article valuable when it comes to learning about DSCR loans. If you’re interested in learning more then please subscribe below to get alerted of new investment opportunities from InvestmentU.

The post DSCR Loan: What Is It and How To Use It? appeared first on Investment U.

Right now, stock market plumbing stocks could be that rare opportunity that other investors aren’t talking about. Hear me out real quick…

The Bull Case For Plumbing

Aging Baby Boomers = More Home Maintenance

One economic megatrend that could spur investment in plumbing stocks is the aging Baby Boomer population. At 73 million people, Baby Boomers make up the second-largest generation behind Millennials. Over the next two decades, this generation will slowly start to retire – a trend known as the “Silver Tsunami.” Traditionally, an aging couple would downsize into a smaller home. But, it doesn’t look like many Boomers are doing this.

Many Baby Boomers locked in record-low mortgages during the pandemic when interest rates were at nearly 0%. Right now, many Baby Boomers are refusing to sell their home and downgrade to a smaller living space. After all, why would they? If you’re locked into a 2 or 3% mortgage then it makes no sense to move and take on a mortgage closer to 6% or 7%. Baby Boomers aren’t the only ones contributing to this trend. But, they’re playing a big role.

So, with this in mind, we can expect many Baby Boomers to age in place over the coming years. This inevitably means they’ll need to upgrade their existing homes, which could lead to a surge in demand for plumbing (along with home repair services in general). 

But, this isn’t the only trend that could cause demand for plumbing services to skyrocket.

Commercial-to-Residential Conversions = High Plumbing Demand

Another tailwind for stock market plumbing stocks is in the commercial real estate market. Specifically, the fact that many office buildings could be converted into housing over the coming years.

Ever since the pandemic, remote work has surged in popularity. This has had a chain reaction for the commercial real estate market.

1. The value of office space has tanked: With so few people working in person, office space values have dropped. The exact percentage drop depends on the market. But, CoStar estimates that office values have dropped 15% in the past two years. I personally feel that office values are dropping much more rapidly. But, lower prices have not been realized yet because so few people are buying/selling office buildings. 
2. Developers are looking to repurpose office space: Instead of sitting on assets that are losing value, many owners of office space are converting them into something more useful: apartments. Some cities, like Boston, have already announced hefty tax incentives to get the wheels moving on these conversions.

So, the problem is that office buildings are losing value rapidly. The solution is to turn these now-useless assets into something valuable: affordable housing. By doing this, developers could kill two birds with one stone. But, there’s just one problem: It’s hard to convert office space to apartments. 

This conversion process requires tons of maintenance including installing dozens of new bathrooms. After all, an office normally only has one or two bathrooms per floor (depending on the size of the office). But, if you are converting one office space into 20 apartments then you’ll need 20 different toilets, showers, and sinks. Now, multiply this by all of the office buildings across the country in the process of converting office space. Now you know why I’m bullish on the plumbing sector.

With all that said, let’s explore some of the top stock market plumbing stocks that could benefit from these megatrends.

Ferguson PLC (NYSE: FERG)

Ferguson PLC is a British plumbing and heating products distributor that primarily operates in North America. This company specializes in infrastructure, plumbing, and HVAC. It has been making big moves in the plumbing industry as the company recently acquired two other plumbing companies:

1. Yorkwest Plumbing Supply Company: A leading distributor of plumbing, municipal, hydronics, institutional, HVAC, and industrial products in the greater Toronto area
2. Grove Supply Inc: A NJ-based plumbing and HVAC distributor that serves the residential trade, builder, and remodel markets.

Ferguson’s stock is up 13% so far through the year. The company also reported 2023 annual revenue of $29.7 billion (+4% annually) and $1.89 billion in net income (-11% annually). Keep an eye on Ferguson PLC to be one of the top stock market plumbing stocks in the coming years.

Emcor Group (NYSE: EME)

Emcor Group is an American mechanical and electrical construction, industrial, and building services company. It’s not as much of a pure-play plumbing stock as Ferguson is. But, this all-in-one construction company could still benefit from the two trends that I highlighted in the beginning.

So far through the year, Emcor’s stock has risen roughly 80%. The company also reported 2023 annual revenue of $12.6 billion (+13% annually) and $633 million in net income (+56% annually).

Comfort Systems USA (NYSE: FIX)

Comfort Systems is a leading building and service provider for mechanical, electrical and plumbing systems. The company is composed of 43 operating companies who operate in 173 locations across the US. This diversification is crucial as it will help Comfort Systems take advantage of the above trends on a nationwide scale.

Comfort System’s stock is up nearly 60% so far through the year. The company also reported 2023 annual revenue of $5.2 billion (+26% annually) and $323 million in net income (+31% annually).

Home Depot (NYSE: HD)

Although not specifically a plumbing stock, Home Depot could also benefit from the trends listed above. Home Depot is the go-to store for most DIY homeowners. But, this massive construction supply company has been trying harder to attract “pro” customers in recent years. This includes contractors or small businesses who need supplies for paid projects.

According to Yahoo Finance, the “pro” consumer makes up roughly 50% of Home Depot’s customer base, compared to 25% for Lowe’s (NYSE: LOW). In all honesty, Lowe’s and Home Depot are incredibly similar companies. But, the fact that Home Depot attracts more pro customers gives it a leg up over Lowe’s. 

Home Depot’s stock is up 1% so far through the year. The company also reported 2024 annual revenue of $153 billion (-3% annually) and $15.1 billion in net income (-11% annually).

It’s also a great stock to add to your dividend portfolio with it’s 2.69% yield.

I hope that you’ve found this article valuable when it comes to discovering the top stock market plumbing stocks to buy. If you’re interested in learning more then please subscribe below to get alerted of new articles.

Disclaimer: This article is for general informational and educational purposes only. It should not be construed as financial advice as the author, Ted Stavetski, is not a financial advisor. 

The post 4 Stock Market Plumbing Stocks: Take Advantage of Two Megatrends appeared first on Investment U.

Elon Musk has said that Tesla is willing to give a giant long-term contract to a nickel mining company. That’s if it’s able to produce it efficiently and in an environmentally sensitive way. On top of Tesla’s request, other EV producers will need similar resources. And that bodes well for the nickel mining stocks.

On top of that, issues with global nickel supply have gotten worse. Russia has one of the highest nickel reserves coming in around 7 million metric tons. It’s also one of the world’s leading nickel producers. But with the ongoing conflicts and trade limitations, this limits supply to the rest of the world. As a result, we’re seeing many metal prices increase…

Nickel is just one of a few resources seeing a spike in demand in the wave of the EV trend. So click here for a list of the top graphite stocks as well. And to get a better picture of what’s happening, I’ll highlight some of the key trends below. But first, let’s take a look at the top nickel mining stocks…

Top Nickel Stocks in the Mining Industry

• BHP Group (NYSE: BHP)
• Vale S.A. (NYSE: VALE)
• FPX Nickel (OTC: FPOCF)
• Small Nickel Stock
• Small Nickel Stock

The first two on this list are huge, diversified mining companies. They have some exposure to nickel, but also have stable cash flows from other segments. Their size and economies of scale help provide a little more safety for investors. But the last two are smaller nickel mining stocks with great growth potential…

Nickel Mining Stock Highlights

BHP Group is already selling more than 75% of its nickel production to the EV battery industry. The company also predicts that by 2050 nearly 50% of light vehicles around the world could be electric.

BHP’s major nickel mining operation is Nickel West in Australia. It’s a fully integrated mine-to-market business with more than 3,500 employees and contractors. And BHP is continuing to expand this part of its business, which should make this a top nickel stock going forward.

Vale S.A. is the world’s largest producer of nickel. The company has nickel operations in Brazil, Canada, Indonesia and New Caledonia. It also has fully owned and joint venture refineries in China, South Korea, Japan, the U.K. and Taiwan.

Vale’s scale makes it one of the best nickel mining stocks to consider buying. And as mentioned above, it’s a huge mining company. It also produces iron, copper, coal and manganese, just to name a few. Vale provides cash flows from many different mining operations which makes this one of the top nickel stocks with excellent diversification.

FPX Nickel is a Canadian nickel mining company with its flagship project in British Columbia. Its Decker Nickel District has an estimate of more than 9.2 metric tons of recoverable nickel by 2050. It also has an inferred amount close to 1.5 million pounds.

FPX is still considered a junior mining company. But its leadership team is pushing many projects forward to grow the business. Collectively, the management team has worked in more than 35 countries and has a wide range of experience in the mining industry. This could make it one of the best nickel mining stocks to watch in the future.

Talon Metals has a joint venture with Rio Tinto and is focused on supplying the expanding EV market. It also produces copper and cobalt, two other import metals for the EV industry.

Talon’s main project is located in Minnesota. It’s the high-grade Tamarack Nickel-Copper-Cobalt Project, and it’s separated into northern and southern projects. The company focuses on lowering costs while producing nickel in an environmentally friendly and socially responsible way, making it a one of the best nickel stocks for the environmentally conscious investor.

Canada Nickel Company is another junior miner that can benefit from the EV boom. It owns 100% of the Crawford Nickel-Cobalt project in Ontario, Canada. It’s a recently discovered mining asset that was owned by a forest company up until 2011.

Based on the company’s recent reports, the Crawford resource ranks as one of the 10 largest nickel sulfide resources globally. Its measured estimate of nickel comes in at close to 1.2 kilotons. So it’s a well-positioned nickel stock as the battery storage market continues to grow…

EV Boom Drives Nickel Prices Higher

As EV demand continues to grow so will nickel demand. The batteries in these vehicles require a lot of the metal. It helps deliver higher energy density and greater storage capacity at a lower cost.

With future battery innovations on the horizon, nickel is also set for an increasing role in energy storage systems. This is likely why Tesla and others are looking for long-term supply contracts.

The EV market is still in its early stages and the potential is huge. The top nickel mining stocks above could provide solid returns in the coming years. Also, as mentioned before, some other metals are vital. Here’s a list of the top lithium stocks to consider buying as well.

In 2021, roughly 9% of new car sales around the world were passenger plug-in vehicles. And that’s up from about 4% in 2020. The trend is picking up steam, and EVs make up only a small portion of cars on the road today.

Overall, more auto manufactures and consumers are shifting toward the EV future. It’s a powerful trend and bodes well for various metal and nickel stocks that will play a huge role in EV battery production. There are many investment opportunities to consider today…

The post Top 5 Nickel Stocks to Invest in the Electric Vehicle Boom appeared first on Investment U.

Last summer the lumber market tested levels below 500 only to spike again months later. Prices have since dropped more than 50% back to those lower levels…but will they continue to fall?

When Will Lumber Prices Go Down?

You know it’s bad when you’re driving down the road and you see billboards for composite decking advertising that they are “cheaper than wood”. But that is exactly how things have been over the past few years.

If you monitor lumber prices in general, you know they typically start falling around Labor day and reach their yearly low around Thanksgiving. This could present a good buying opportunity for individual buyers, companies and investors.

So when will lumber prices go down? Historically, the answer would be “now” or “over the next 2 months.” But as we’ve seen, the last two years have done anything but follow historical precedent.

Top Lumber Stocks

In a recent Investment U article about lumber stocks, Brian Kehm highlighted two stocks with unique opportunities for future profits.

Weyerhaeuser (NYSE: WY)

Kehm highlights Weyerhaeuser as one of the largest forest product companies in the world. Owning more than 11 million acres, Weyerhaeuser is shielded from localized forest damage. The company also has solid balance sheets and impressive cash flows.

Weyerhaeuser stock has more than doubled since the start of the pandemic…but those profits have not benefited all of the employees. In fact, as we speak Weyerhaeuser employees in Oregon and Washington are on strike, citing low wage increases and high health care premiums.

“All our members want is their fair share of the profits they earned for the company, keep up with the cost of living, and make the gains that a good employer should offer, in light of the success they have reaped off the labor of their employees,” the union said in a statement.

Negotiations are expected to continue on Friday.

Rayonier (NYSE: RYN)

Rayonier is another company Kehm highlighted. With revenues reaching $1.11 billon in 2021, they have certainly benefited from rising lumber prices. And while Weyerhaeuser’s timber segment only represents 24% of the overall business, Rayonier’s timber segment is nearly 3/4ths of all business operations.

Because of the company’s lack of diversification into the real estate and manufacturing segments, their ups and down over the past 2 years have not been as dramatic. Rayonier’s revenue has dropped more than 15% year over year, but the $860 million from 2021 went a long way towards meeting any debt payments.

Currently offering a 3.32% dividend yield, the company recently declared a third quarter cash dividend of $0.285 per common share. The dividend is payable on September 30, 2022, to shareholders of record on September 16, 2022.

The Company also announced a third quarter cash distribution of $0.285 per operating partnership unit. The cash distribution is payable on September 30, 2022, to holders of record on September 16, 2022.

When Will Lumber Prices Go Down to Pre-Pandemic Levels?

Prior to the pandemic, lumber was selling anywhere from $300 – $400 US per 1,000 board feet. It is quite possible we will not see those prices ever again. This is now the second time since the pandemic started that the market has tested the $500 level. As inflation, supply chain issues and labor shortages continue, we could see another large price increase after Thanksgiving.

Currently, there is another supply chain issue brewing in the form of a railroad worker strike. This “could add further volatility to the price of lumber and other commodities that rely on freight trains.”

When will lumber prices go down? For the answer to important questions like this, sign up for one of our free daily newsletters. Just hop on over to our best investment newsletters page and sign up for free today. Our goal is to find the best investment opportunities around and deliver them to you as quickly as possible. Sign up today to become a smarter, more profitable investor.

The post When Will Lumber Prices Go Down (Even More)? appeared first on Investment U.

By investing in the best silver mining companies, you can see higher returns than buying the metal directly. Although, timing is important. So, let’s start by digging into why now might be a good time to buy. Then from there, we’ll dive into the top silver stocks…

Why Invest in the Best Silver Companies?

As uncertainty has picked up around the world, investors seek out safer assets. And gold and silver fit the bill. Compared to many other asset classes, there’s a much longer track record for precious metals.

With the rise and fall of nations, silver has held its ground. And it’s often considered a poor man’s gold… but both gold and silver have their place. And silver mining companies tend to produce both.

When looking at demand for silver, you’ll often find it in silverware and jewelry. Although, it has many other uses as well. You can find silver in dental alloys and elsewhere in the medical world. Also, silver is one of the best metals for conducting electricity and heat.

One area that’s pushing silver demand higher is the renewable energy industry. We use it in solar panels and the growth in the solar industry is ramping up at a rapid pace. To learn more, check out these solar stocks.

Another reason we’ll likely see higher silver prices is government stimulus. Over the past few years, governments around the world pumped money into their economies at record rates. Some of this was direct with stimulus checks but the vast majority came from other efforts such as quantitative easing.

This has created huge waves in the markets and with more dollars sloshing around, we’ve started to see higher inflation. As more people are seeing the value of their dollars drop, they’re turning to gold and silver. And this bodes well for the best silver stocks…

Best Silver Stocks

• Pan American Silver (Nasdaq: PAAS)
• Fortuna Silver Mines (NYSE: FSM)
• First Majestic Silver (NYSE: AG)

Pan American Silver

Pan American Silver is a Canadian mining company that has operations across Latin America. You can find some of its projects in Mexico, Peru, Bolivia and Argentina. Pan American Silver has more than 500 million ounces of proven and probable silver reserves.

This scale easily makes Pan American Silver one of the best silver stocks to buy. The company has built a long track record of delivering value to shareholders. The share price has come down over the past few years and that’s true with the other stocks on this list. Although, now might be a better time to buy. Pan American Silver also continues to reward investors with dividends.

Fortuna Silver Mines

Compared to Pan American Silver, Fortuna Silver Mines is much smaller. However, it has some valuable operations that help make it one of the best silver stocks to consider. The company is also based in Canada with operations in Latin America. Although, it has some ventures in West Africa as well.

Fortuna Silver Mines has more than 25 million ounces of proven and probable silver reserves. And the bulk of that comes from its mining efforts in San Jose, Mexico. Fortuna Silver also has more than 3 million ounces of proven and probable gold reserves.

First Majestic Silver

First Majestic Silver is another – you guessed it – Canadian mining company. It has various mining operations in Mexico with 100% ownership. These are high quality mines that should help First Majestic generate sales for many years.

First Majestic Silver has more than 60 million ounces of proven and probable silver reserves. The bulk of this comes from its San Dimas mine. This is a cornerstone asset for the company and the property has more than 70 thousand hectares of mining claims within the state of Durango, Mexico.

More Investing Opportunities

The silver companies above are some of the best in the industry. Buying into these silvers stocks gives investors solid exposure to the metal. Although, it can be good to diversify. Here are some other investing opportunities to consider…

• Best Uranium Stocks
• Vertical Farming Stocks
• Top Nickel Stocks

On top of these, you can also sign up for the best investment newsletters. They’re free and packed with insight from investing experts. They cover a wide range of investing strategies and opportunities. Here at Investment U, we strive to deliver some of the best investment research today…

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Vale has built up an impressive global supply chain that keeps cash flowing. It’s paid investors dividends each year over the past decade, but will this trend continue? And which way will its share price move? Let’s take a closer look at the company’s potential going forward…

Vale Stock Forecast

Always take predictions with a grain of salt. No one can consistently forecast the future with accuracy. Although, there are some big trends at play that will impact the price of Vale (NYSE: VALE) stock. And already, we’re seeing some big price moves.

In the short-term, there’s increasing pressure on the global economy. Covid lockdowns still continue in certain areas. And this, along with some environmental issues, are disrupting the flow of resources.

On top of that, there’s the ongoing war in Europe. And looking to Asia, there’s a major housing crisis going on in China. This is putting downward pressure on building materials around the world. And we’ve seen many metal prices drop such as iron, a key revenue driver for Vale.

This doesn’t bode well for a Vale stock forecast in the short-term. Already, we’ve seen Vale’s share price drop back down. It’s near its 52-week low. But with continued global pressures, I wouldn’t be surprised to see it drop further.

In 2021, we saw Vale’s revenue jump close to BRL 294 billion (Brazilian Real). That was up 43% from BRL 206 the previous year and profits jumped as well. But now demand is taking a hit. Many metal prices are moving down leading to lower sales.

Nonetheless, Vale is a solid company with good long-term prospects. As Vale stock drops further, it’s creating better buying opportunities for long-term investors. Let’s take a closer look at the mining giant and its growth moving forward…

Long-Term Predictions

To see where Vale stock might go, let’s take closer look at the company. How is it positioning itself for future growth?

The company continues to lead with iron production. It has revised its 2022 production guidance down to 310-320 Mt. In the short-term, this isn’t great but it’s still producing solid cashflows. And long-term, its iron production should lead to higher sales.

One area that’s more exciting for growth is nickel. Even though it’s come under some recent downward pressure, EV battery demand could boost it higher in the years ahead. This is an important consideration for a long-term Vale stock forecast. There are some huge tech changes and economic shifts at play. For example, check out these top EV charging station stocks.

Vale produces nickel in Canada, Indonesia and Brazil. In Q2 2022, it produced 35 kt of nickel and this is down from the previous quarter. Although, with demand for nickel increasing with EVs in the years ahead, the company will likely increase its production.

Another useful metal that Vale produces is copper. The company forecasts its copper production should come in around 270-285 kt in 2022. Vale has lots of irons in the fire, pun intended.

As one of the largest mining companies in the world, Vale is one of the best investing opportunities in the industry. It has economies of scale and diversified cashflows. This has helped it pay dividends to investors.

Payouts have been volatile, but some income helps while waiting for its share price to move higher. If the share price drops further, I might be adding some shares to my portfolio. And the company has been buying back its own shares. With lower prices, the buybacks can make more sense for shareholders.

Better Investing Opportunities

I hope you’ve gained some insight with this quick Vale stock forecast. There’s a lot to like about the company over the long haul. Although, we might be getting some better price points to buy in the short-term. There’s a lot of downward pressure from various events around the world. And it looks like things might get worse before getting better.

There are many investment opportunities to consider and the markets are always moving. Here are a few more trends and stocks to consider…

• Best Nickel Stocks
• Uranium Energy Stocks
• Top Agriculture Stocks

The best stocks to buy today might not be the same in the weeks ahead. If you’re looking for expert research, check out these free investment newsletters. They’re packed with investing tips and tricks from market experts.

The post Vale Stock Forecast for Investors in the Mining Company appeared first on Investment U.

On top of that, these gold companies can help to diversify your portfolio. The mining industry offers many opportunities and I’ll share more investment ideas below. But to start, let’s look at the list of gold mining stocks, along with some company highlights…

Gold Mining Stocks

• Barrick Gold Corp. (NYSE: GOLD)
• Newmont Corp. (NYSE: NEM)
• Franco-Nevada Corp. (NYSE: FNV)
• Agnico Eagle Mines Ltd. (NYSE: AEM)
• Wheaton Precious Metals Corp. (NYSE: WPM)
• Eldorado Gold Corp. (NYSE: EGO)

Gold Mining Company Highlights

Barrick Gold is a Canadian company that produces gold and copper. It operates mines and projects in 18 countries. And you can find them in North and South America, Africa, Papua New Guinea and Saudi Arabia.

Barrick Gold is easily one of the best gold mining stocks based on volume and scale. In 2021, the company produced 4.4 million ounces of gold. And this year, it expects close to the same level of production.

Newmont is another huge gold mining company. It’s based in Colorado but owns gold mines around the world. You can find the company’s portfolio of assets, prospects and talent in North America, South America, Australia and Africa.

Newmont produces roughly 6 million ounces of gold each year. That’s the largest output on this list of stocks. And Newmont also produces other metals such as copper, silver, zinc and lead.

Franco-Nevada is another Canadian gold company. Although, it’s a gold-focused royalty and streaming company. It provides investors with gold price and exploration optionality while limiting exposure to cost inflation.

So, it’s not a direct gold mining stock but it works directly with gold miners. And the company has continued to grow over the years. In 2021, it topped 700,000 gold equivalent ounces.

Agnico Eagle Mines is based in Canada and also operates in multiple countries. This gold mining stock gives investors access to operations in Canada, Australia, Finland and Mexico.

The company is well diversified and in 2021, its payable gold production came in just above 2 million ounces. And for 2022, Agnico Eagle Mines is forecasting gold production of roughly 3.2 to 3.4 million ounces.

Wheaton Precious Metals is another major Canadian mining company. It has streaming agreements for 23 operating mines and 13 development stage projects.

The bulk of its production is silver, but it also helps to produce gold, as well as other precious metals. Last year, Wheaton Precious Metals’ diversified portfolio of assets delivered production of just over 750,000 gold equivalent ounces.

Eldorado Gold is the smallest gold mining stock on this list. Although, it’s still far-reaching with mining, development and exploration in Turkey, Canada, Greece and Romania.

Last year, the company produced about 476,000 ounces of gold. And for full-year 2022, Eldorado Gold is forecasting production of 460,000 to 490,000 ounces.

If gold prices move higher this year, these gold stocks should do well.

Why I Avoid Gold Long-Term

First, I want to emphasize that the gold mining companies above are some of the best in the business. And as mentioned, if you buy in at the right times, you can see big upswings that beat the market.

Although, in the long-run, there are better investing opportunities. And here are just a few reasons why I avoid investing in gold…

Unlike the world’s best companies and farmland, gold doesn’t produce anything. And on top of that, it has little application. People pay a lot to dig it out of the ground and refine it. Then from there it sits around doing nothing. On top of that, some people even pay to keep it safe with safety deposit boxes, insurance, etc.

Nonetheless, one common reason people buy gold is to hedge inflation. And yes, it has worked as an inflation hedge over the long-run. That’s when looking at multi-decade timeframes. But in any given year, two years, five years and even 10 years, gold prices are too volatile.

If you’re looking to hedge against inflation in the short-term, treasury inflation protected securities (TIPS) are a better way to go. And for the long-term, a broad portfolio of stocks is even better. Over the long-run, stocks not only hedge inflation, but far outpace it.

Investing Beyond Gold Mining Stocks

With that all in mind, here are some other stocks to consider…

• Best Nickel Stocks
• EV Charging Station Stocks
• Vertical Farming Stocks
• Agriculture Stocks

Once again, the gold mining stocks above are some of the best in the industry. If you’re looking to play some short-term trends, they might be a good way to go. Gold stocks can amplify gains from increases in gold prices.

Although, it’s good to consider other investments as well. And if you’re looking for expert insight, consider signing up for one of these free investment newsletters. They’re packed with investing research, tips and tricks.

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KoBold Metals stock is not publicly-traded at the moment. In general, this startup seems to be far from a public debut on the American market. However, its latest project may help speed up the process. Will a KoBold Metals IPO come sooner rather than later? Let’s take a closer look at this pioneer in clean energy exploration.

KoBold Metals History and IPO Potential

KoBold Metals was founded in 2018 and it’s based in California. It’s the first mining exploration company to use artificial intelligence (AI), according to its official website. KoBold is “applying modern artificial intelligence and cloud computing techniques to predict the composition of the subsurface” in exploration projects on their own properties and partner sites. Moreover, its focus is using this cutting-edge technology in a commitment to the “long-term development of new battery metal resources.”

This is where its powerful backers come into play. Specifically, the likes of Jeff Bezos, Michael Bloomberg and Bill Gates, among others. This trio of billionaires is a part of the group which is funding a green energy treasure hunt, so to speak. And KoBold Metals is the company they are relying on.

Due to climate change, the ice caps are melting at a historic pace in Greenland. And while this crisis is devastating to say the least, it also presents an opportunity for mining companies to search for critical minerals that will help fight the climate crisis as we move forward.

There is belief that below the surface of Greenland’s Disko Island and Nuussuaq Peninsula is enough nickel and cobalt to power countless millions of electric vehicles.

“We are looking for a deposit that will be the first- or second-largest most significant nickel and cobalt deposit in the world,” KoBold Metals CEO Kurt House told CNN.

If this bet pays off, KoBold Metals will be at the forefront of the push for a green energy transition around the world. Furthermore, some of the world’s richest men are already on board. This alone is sparking conversation for a potential KoBold Metals IPO in the future. The question is how soon, if at all?

KoBold Metals Stock Interest

KoBold is a private company with some of the most powerful backers in the world. Other early-stage investors include BHP Group (NYSE: BHP), Mitsubishi Corporation (OTC: MSBHF) and Silicon Valley venture capital firm Andreessen Horowitz.

In 2019, the company raised $20 million in its Series A funding round, which was led by Andreessen Horowitz. In early 2022, Series B funding brought in $192.5 million through a number of investors.

As you can see, the interest in this AI-powered mining exploration company is growing rapidly. And a few of the early-stage investors are publicly-traded. For instance, BHP Group is trading around $50 per share. Mitsubishi, while an over-the-counter stock, is trading for close to $30.

A KoBold Metals IPO is not in the works currently. However, time will tell if this startup can continue its rise on a path to a public debut. One thing is for sure, the climate crisis is going to be a huge undertaking around the globe. And the innovations at KoBold are leading the charge in what could be a monumental step forward via the Greenland exploration project.

In fact, KoBold is using artificial intelligence to analyze and map the layers of rock below the surface. Once it pinpoints specific locations, drilling can commence within the coming year or so.

Investing in Startups

Investing in startups comes with additional risks. This is why you must do your due diligence before making any investment decisions. You may also want to consider signing up for one of the best investment newsletters. These daily briefings give readers stock analysis, tips and trends that can help provide more insight for your research.

A KoBold Metals IPO may be one to watch for the future, but there are no plans for a public listing anytime soon. In the meantime, there are many other AI stocks for you to consider while you wait for KoBold Metals stock.

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