The head of one of the world’s most valuable gold miners believes there’s only one reason to buy a gold mining stock – and too few companies in the industry are offering it to investors.

“The only reason you want to buy an equity is if it gives you a better return than just buying gold,” Agnico Eagle Mines CEO Ammar Al-Joundi said in an interview with Bloomberg.

Toronto-based Agnico Eagle is one of the few large-cap gold mining stocks to outperform bullion in the last year, rising 84% while gold has added 44%. Agnico has also more than doubled the performance of rivals Barrick Mining and Newmont – surpassing both on a market capitalisation and a price-to-earnings basis in the process.

Meanwhile, a quarter of the stocks in the 56-member VanEck Gold Miners ETF have underperformed the commodity so far this year, even as investors have sought exposure to record-setting gold prices amid tariff-induced economic uncertainty and flaring geopolitical tensions.

Indeed, exchange traded funds that track gold mining stocks have seen massive outflows this year, an indication that investors are taking profits in the stocks rather than seeing long-term value in the sector.

Al-Joundi said the industry’s less-than-gilded reputation with investors stems from overspending their cash flows, embarking on “dumb deals” and generally making poor decisions in periods of elevated commodity prices. He noted that global mining companies wrote down nearly $50-billion in assets since 2013.

“If some of us are blowing our brains out, they look at us and say, ‘That’s a crappy industry, I’m not even going to look at it,’” Al-Joundi said of generalist investors.

The gold-mining sector “hasn’t been a long-term creator of value,” according to Greg Taylor, chief investment officer at Penderfund Capital Management.

Taylor said that generalist investors currently prefer to buy and hold either physical gold or precious metals royalty companies, like Franco-Nevada Corp., to gain exposure to gold and silver. The miners, he said, are viewed as stocks to trade in and out of cyclically rather than as long-term holdings.

Agnico Eagle is one of the gold mining stocks that has been able shake the broader industry’s reputation, according to Taylor, but industry-wide valuations will appreciate if more companies can also learn not to overspend when gold prices are flirting with all-time highs.

“This cycle, so far, has been a little bit more encouraging because you haven’t seen anything too offside, just yet,” Taylor said.

To be sure, Al-Joundi said that while his stock has benefited, he wants all the major gold miners to keep a tighter lid on their spending, to avoid diluting their shares with poorly timed acquisitions because it will lead to higher valuations across the sector.

He said it will also help Agnico Eagle trade at an even higher multiple. Agnico Eagle shares currently trade at 25 times their earnings — twice as rich as the 14-times-earnings multiple of Newmont and 9-times-earnings valuation for Barrick.

Even if investors continue to treat gold — rather than the miners — as a long-term value holding, Al-Joundi said that’s a positive for his company.

“I would encourage people to buy the hard asset because, at the end of the day, that’s good for us as well.”