2 cheap growth stocks I'd buy and hold forever

The volatility being seen in global share indices could be the start of a more precarious period for the world economy. After years of low interest rates and modest inflation, a new era of hawkish monetary policy and higher rises in the price level could be ahead.

Part of the reason for this could be aggressive tax cuts and higher spending plans in the US, while continued loose monetary policy across the globe may push inflation up further.

In such a scenario, gold stocks could be a good place to invest. Historically, they have helped to protect investors against higher inflation. With that in mind, here are two gold miners that could be worth buying today.

Improving performance

Reporting on Wednesday was Russia-focused gold miner Petropavlovsk(LSE: POG). The company's 2017 results showed that gold sales moved 10% higher, while the average realised gold price was up 3% to $1,262/oz.

Together, these factors helped to push the company's revenue 9% higher, while its underlying EBITDA (earnings before interest, tax, depreciation and amortisation) was in line with 2016 levels. This was largely due to total cash costs increasing by 12%, which in turn were caused by unfavourable currency effects and lower processing recoveries and grades.

Looking ahead, Petropavlovsk is expected to report a rise in its bottom line of 56% in the current year. This puts the stock on a price-to-earnings growth (PEG) ratio of just 0.1, which shows that it could offer high growth at a reasonable price.

Certainly, the company may lack the diversification of some of its mining sector peers. But with the gold price having the potential to rise in future years and the company continuing to offer operational improvements, it could prove to be a sound buy.

Income appeal

As well as offering the prospect of improving performance should the rate of inflation increase, gold miner Randgold Resources(LSE: RRS) also has strong income potential. The company has been able to build a robust balance sheet which contains no debt and sufficient cash to deliver on its exploration goals over the medium term. As such, it can afford to pay an increasing proportion of earnings as a dividend without hurting its financial standing.

For example, in the current year it is expected to yield 4%. Next year, dividends per share are due to rise by 21%. This puts it on a forward dividend yield of 4.8%, which is likely to remain significantly above inflation over the coming years.

Since Randgold Resources' profitability may benefit from a higher gold price, its bottom line could increase at a fast pace. Given that it trades on a PEG ratio of 1, it appears to offer a solid growth outlook. And for investors who are concerned about the effects of inflation, it could prove to be the perfect stock to buy for the long run.

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Peter Stephens owns shares of Randgold Resources Ltd. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.