Are These The Best Copper Stocks To Invest In Now?
As we begin the trading week, investors could be thinking of the best copper stocks to buy today. For the most part, this would be the case as more rotate out of less defensive names in the stock market now. Accordingly, all of this is due to a combination of worsening Covid conditions and looming interest rate hikes, stifling growth. Now, for newer investors, you might be wondering, what’s the big deal with copper? Well, simply put, copper is currently among the hottest commodities in the world now. Namely, this is thanks to its crucial role in booming sectors across the board. From key infrastructure to electric vehicle (EV) parts, copper is present and very much in demand now.
Likewise, the price for the precious commodity has and continues to rise amidst supply chain bottlenecks, dwindling stockpiles, and the ongoing clean energy transition. For one thing, investors have plenty of mining companies to consider in this space. Take BHP Group (NYSE: BHP) for instance. This multinational mining firm produces millions of tonnes of copper on an annual basis. Elsewhere, even gold companies such as Newmont (NYSE: NEM) are active players in the copper industry as well.
By and large, the case for copper stocks continues to grow, and it seems like companies are more than eager to accommodate. Having read this far, you might be keen on the industry yourself. In that case, here are four top copper stocks to consider in the stock market today.
Copper Stocks To Buy [Or Sell] This Week
- Southern Copper Corporation (NYSE: SCCO)
- Freeport-McMoran Inc. (NYSE: FCX)
- Vale S.A. (NYSE: VALE)
- Rio Tinto (NYSE: RIO)
Southern Copper Corporation
First up, we have Southern Copper, one of the largest integrated copper producers in the world. The company also produces molybdenum, zinc, lead, coal, and silver. Its mining, smelting, and refining facilities are located in Peru and Mexico. The company also has ongoing exploration activities in those countries and Chile. In fact, the company boasts some of the highest copper reserves in the mining industry and has good long-term copper and molybdenum market fundamentals.
In its latest quarter reporting in October, the company posted a net sales of $2.68 billion, a 25.9% increase year-over-year. Metal prices increased for copper, molybdenum, and zinc. Net income for the quarter was $867.6 million, representing a 71.5% increase compared to a year earlier. Copper production for the quarter was 720,658 tons. Southern Copper also paid a dividend of $1.00 per share. Given the impressive quarter, should investors be on the lookout for SCCO stock right now?
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Freeport-McMoRan Inc.
Freeport-McMoRan (FCX) is a leading international mining company that operates large, long-lived geographically diverse assets. It has significant proven and probable reserves of copper, gold, and molybdenum. The company’s assets include the Grasberg minerals district in Indonesia, one of the largest copper and gold deposits in the world. It also has significant mining operations in North America and South America.
In November, the company announced that its Board of Directors have approved a new share repurchase program, authorizing repurchases of up to $3 billion of FCX common stock. Furthermore, the board also approved the addition of a variable cash dividend on common stock for 2022 at an expected annual rate of $0.30 per share.
The board also adopted a financial policy for the allocation of cash flows aligned with FCX’s strategic objectives last year. This would help maintain a strong balance sheet and increase cash return to shareholders while advancing opportunities for future growth. The combined base dividend, variable dividend, and share repurchases are designed to achieve the objectives of this performance-based payout framework. With this being said, is FCX stock worth investing in?
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Vale S.A.
Vale is a multinational Brazilian corporation that engages in metals and mining. It also owns one of the largest logistics operators in Brazil. Aside from logistics and mining, the company also has a steel-making and energy business. In brief, it has a portfolio of power supply contracts and self-generation, consisting mainly of renewable energy sources.
Last month, the company announced the sale of its coal assets. It has entered into a binding agreement with Vulcan Minerals to sell the Moatize coal mine and the Nacala Logistics Corridor for total proceeds of $270 million.
This follows an announcement that Vale made in early 2021, that its objective is to no longer own coal assets. “I am pleased to announce this important step for the responsible divestment of Moatize and NLC, in a transaction that benefits the communities and governments where those operations are located and offers a sustainable future for the operations. This is another accomplishment on our commitment to reshape our company, focusing on our core businesses,” said Eduardo Bartolomeo, Vale CEO. Given this piece of information, is VALE stock a buy?
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Rio Tinto
Last but not least, we will be taking a look at Rio Tinto, or RIO for short. In brief, it is an Anglo-Australian multinational mining company. Notably, RIO is the second-largest metals and mining corporation globally. Across its portfolio, the company produces iron ore, diamonds, gold, uranium, and copper. Speaking of copper, RIO has operations at various stages in the mining life cycle across the globe. This ranges from exploration to rehabilitation. Through its global copper mining network, RIO primarily caters to clients in China, Japan, and the U.S.
As it stands, RIO stock currently trades at $71.59 as of 10:45 a.m. ET. This would be after gains of over 11% in the past month. Even so, the company remains as busy as ever on the operational front. As of last month, the company is set to acquire the Rincon lithium project in Argentina from Rincon Mining. According to RIO, it is gaining access to a “large undeveloped lithium brine project” via the $825 million deal.
In theory, this would be yet another solid play for RIO as lithium is yet another crucial metal for EVs. All in all, could all this alongside its impressive work with copper make RIO stock a top pick for you now?
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