Here's Why AU Stock Tripled This Year
Key Points
Gold plays a key role in AngloGold Ashanti's stock price, and rising gold prices acted as a major tailwind.
The miner's ability to produce more gold and maintain a strong balance sheet helped it outperform other gold miners.
Investors have to be patient and stick with reliable companies, even during bad quarters and market corrections.
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AngloGold Ashanti (NYSE: AU) caught a lot of investors by surprise with its 245% gain this year. The global gold mining company is up by 262% over the past five years, which truly paints the image of a slow-moving equity becoming a scorching-hot growth stock.
The company has mines in Africa, Australia, and the Americas. Effective cost management helped it ride the gold surge while giving investors a quarterly dividend. Its 2.59% yield helped it outperform the S&P 500 this year and over the past five years. However, AngloGold Ashanti stock was underperforming the S&P 500 leading up to the 2025 rally.
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These are some of the details AngloGold Ashanti investors should monitor that can impact the stock's future returns.
Image source: Getty Images.
Gold prices are the key factor
Since AngloGold Ashanti mines gold, it's no surprise that the precious metal plays a decisive role in the stock's price movements. Gold has soared by more than 60% this year, setting the perfect backdrop for a gold mining stocks rally.
Rising gold prices aren't the only factor. For instance, fellow gold stock Newmont surged by 155% this year. Both companies dig gold from the Earth, so why did one rally more than the other?
AngloGold has company-specific factors that led to its market outperformance as well. That's why gold miners can outperform or underperform gold at any given time. However, gold miners typically need gold prices to go up for their stocks to generate positive returns.
The company is discovering more gold
AngloGold Ashanti made the most of rising gold prices. Its gold production increased by 17% year over year in Q3, which drove a record $920 million in free cash flow. That figure was up by 141% year over year.
The company mentioned several mines in Africa and South America as top performers that resulted in higher gold production. AngloGold Ashanti is preparing to increase gold production even more in 2026 with investments in its Mineral Reserve base and enhancing operational flexibility.
The gold miner is investing in future growth while strengthening its balance sheet. AngloGold closed the quarter with $4.54 billion in current assets and $1.76 billion in current liabilities, resulting in a healthy 2.58 current ratio. A strong balance sheet can support dividend hikes and additional mining projects.
Sometimes it takes a while to strike gold
AngloGold Ashanti investors got their big payoff in 2025, but long-term investors watched their shares underperform the S&P 500 over the past few years until this big break. If gold prices continue to rise, the miner should build on its excellent 2025 performance.
Investors have to ride through volatility, corrections, and bad earnings results regardless of which stocks they buy. Focusing on the quality of a company can help investors continue to hold shares in long-term success stories instead of letting short-term news and sentiment drive trading decisions.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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