Investing in the Canadian stock market can be an option for certain investors. Find out which companies offer some interesting prospects.
When it comes to investing in the Canadian stock market, investors will have plenty of companies to choose from. For those who want to invest in companies that exploit Canada’s vast natural resources, there are gold production stocks as well as other mining stocks that could be a good option. According to a recent report by the Financial Post, during the past few years, investors have demanded better yields from companies that operate in the mining industry in Canada, especially when it comes to those that produce gold. While it isn’t predicted that 2012 will be a smooth ride for all Canadian mining companies, there are some Canadian corporations which have a goal of returning as much cash as possible to their shareholders. Here are a few that may be worth considering:
Barrick Gold Corp. This company is actually the largest gold company in the world and generates over $1 billion US in earnings each quarter. Once the company finishes its project of building the new Pascua Lama mine next year, the amount of capital that it is committed to spend could go down in a large way, letting it give back more cash to their shareholders. One interesting thing to know about Barrick is that they’ve been raising the amount of dividends that they give back to investors in the past few years. Recent acquisition deals by Barrick gold also have the potential of giving this company more financial flexibility.
Silver Wheaton Corp. This Canadian company has a business model that is quite original. It buys silver from mines that produce them for a low amount of less than $4.00 US per once in exchange for up-front payments to companies which build mines. As silver prices have risen recently to more than $30 US per ounce, this would mean that the company’s margins are quite good. Now that the company has put together a new dividend policy which would tie the payouts to shareholders with its operating cash flows, this could be an interesting investment for some who are looking to invest in the Canadian stock market.
Of course, mining stocks are not the only type of stocks available to Canadian investors who want to invest in companies that take advantage of the natural resources of the country. Certain oil and gas stocks are also available and may be interesting for certain kinds of investors.
It should be noted that stocks tied to mining and energy are often volatile, so investors who choose to purchase them need to be aware of the risks as well as the possible returns. Consulting with a professional investment advisor may be a wise decision to make for those who wish to invest in the Canadian stock market but don’t have too much experience with Canadian stocks or investing in general.
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