This company has moved up lately—along with gold prices. Gold does generally move up along with inflation; however, while inflation remains high, interest rate hikes (such as the U.S. Fed’s recent rise) are aimed at controlling and bring down the inflation rate. That has held back overall inflationary assets like gold and pushed up the U.S. dollar.

But going forward, we think top-quality gold stocks like this one are still buys, in part because the prospects for increased production and cash flow—regardless of gold prices or inflation—remain intact. This stock is a Power Buy.

BARRICK GOLD (Toronto symbol ABX; www.barrick.com) is the second-largest gold producer in the world after Newmont Corp. (symbol NEM on New York).

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Barrick produced 988,000 ounces of gold in the quarter ended September 30, 2022. That’s down 9.5% from 1.09 million ounces a year earlier as it shifted into lower-grade ore zones at some mines. Revenue fell 10.6%, to $2.53 billion from $2.83 billion. Per-share earnings fell 45.8%, to $0.13 from $0.24, on the lower revenue as well as higher costs.

Meanwhile, the company continues to use its strong cash flow, fuelled by rising gold prices, to reward investors; starting with the March 2022 payment, it raised its quarterly dividend by 11.1%, to $0.10 U.S. from $0.09 U.S. The new annual rate of $0.40 U.S. yields 2.2%.

As well, under the company’s new dividend policy, it pays an added performance dividend each quarter. The amount of that payout will be determined by the amount of net cash Barrick has on its balance sheet, For instance, if it holds $1 billion or more, it will pay an extra $0.15 per share. The company paid a performance dividend of $0.05 U.S. a share in the latest quarter.

Mining Stocks: New copper and gold mines should continue growth

Barrick now plans to focus on building new mines instead of making acquisitions. This includes bringing into production the company’s promising exploration projects in Egypt, Nevada, Guyana and elsewhere.

That’s not to say that the company won’t make an acquisition should an appealing opportunity present itself. Specifically, it defines that as a mine that can produce 500,000 ounces of gold annually for a long time and be profitable at gold prices of $1,200 an ounce. Meanwhile, Barrick will deepen its focus on copper and gold, which are often found together geologically.

Although some of Barrick’s assets are located in less stable jurisdictions and come with a higher risk of disruption, the company has a large and diversified global portfolio. That cuts some of its risk as does its big presence in mining-friendly Nevada.

In fact, the company has some of the industry’s lowest production costs, and recent mergers will further cut them. Barrick’s efficiency gains—along with rising output, and the prospect of higher gold and copper prices—give it strong appeal.

Recommendation in Power Growth Investor: Barrick Gold Corp. is a buy.