The tariff uncertainty refuses to die down, and President Donald Trump has signaled an escalation by recently raising tariffs on steel and aluminum imports from 25% to 50%. The European Union has already threatened countermeasures against Trump’s steel tariffs. The U.S.-China trade truce also faces challenges with Trump accusing the world’s second-largest economy of violating the agreement that the two sides reached in Geneva last month.

Trump has flip-flopped on tariffs multiple times, lowering the baseline tariff on all imports to 10% and agreeing to pause most tariffs on China for 90 days. U.S. stocks have been quite volatile this year, crashing on Trump’s tariff rhetoric and bouncing back on reprieves (or Trump “chickening out”, as some prefer to phrase it).

The term TACO, an acronym for “Trump Always Chickens Out,” was coined by Robert Armstrong, a columnist at The Financial Times. It describes a strategy wherein some investors buy the dip when Trump announces tariffs on the assumption that the president will roll them back later, triggering a rally in stocks. Trump said he finds that description “nasty” and sees the frequent changes to tariffs as a negotiating tactic. 

With tariff uncertainty rising yet again, investors might find solace in gold stocks as the ultimate “anti-TACO” trade, as the precious metal is a hedge against an escalation in the trade war. 

Within the gold mining ecosystem, Agnico-Eagle Mines (AEM) looks like a good bet. The company is one of the largest gold mining companies globally and is placed favorably on the global cost curve. Moreover, its management has been quite generous with shareholder payouts and AEM stock has a healthy dividend yield.

Why Agnico-Eagle Mines Is a Good Buy

AEM’s mines are in “safe” jurisdictions in Canada, Mexico, Australia, and Finland. Moreover, the company's all-in sustaining costs (AISC) are expected to be between $1,250-$1300 per troy ounce in 2025, which is quite healthy. 

Agnico-Eagle Mines is in the second quartile of the global cost curve. I would argue that the company is at the sweet spot when it comes to costs, as it has good leverage to any upside in gold prices. On the downside, the company’s costs are significantly below what gold prices (GCM25) currently trade at.

Agnico-Eagle Mines had a net debt of only $5 million at the end of March, and the company plans to have a net cash position of $1 billion on its balance sheet. That would put the company in a formidable position financially, as it would have more cash on its books than the debt it owes.

AEM’s Dividend Policy

Thanks to high gold prices, AEM has been posting healthy cash flows that it has used for deleveraging and shareholder payouts. Last year, Agnico-Eagle Mine returned 43% of its free cash flows to investors in a mix of share repurchases and dividends, while the corresponding number in Q1 2025 was 42%.

During the Q1 earnings call, Agnico Eagle Mines said that for now, it is inclined toward share buybacks. However, CFO James Porter said, “If the gold price stays where it is, there's a very good chance of a [dividend] increase at some point in the future.”

Given the positive outlook for gold prices, I believe Annico-Eagle Mines should increase its dividend sooner rather than later. The company currently pays a quarterly dividend of $0.40, which implies a yield of just about 1.3%. AEM has a long track record of dividends and has been paying one for over four decades. 

While the current dividend yield is not exactly mouthwatering and roughly in line with what an average S&P 500 Index ($SPX) constituent pays, AEM also brings prospects of capital appreciation, especially if gold continues to rally on trade uncertainty and safe haven appeal.

Agnico-Eagle Mines Stock Forecast

Brokerages are also quite bullish on AEM and 11 of the 16 analysts covering the stock rate it as a “Strong Buy.” Three analysts rate Agnico-Eagle stock as a “Moderate Buy” and the remaining two as a “Hold” or some equivalent. None of the analysts rates AEM as a “Sell” and its mean target price of $132.60 is 6.7% higher than the May 2 closing price. The stock has rallied nearly 56% YTD, and analysts’ price targets haven’t seemed to keep pace. 

AEM stock trades at a next-12-months (NTM) enterprise value-to-earnings before interest, tax, depreciation, and amortization (EV-to-EBITDA) multiple of nearly 8.8x, which is higher than peers, including Newmont Corporation (NEM) and Barrick Mining (B). However, Agnico-Eagle has historically commanded a premium over peers given its relatively safe business and strong financial position.