Industrial metals like copper, aluminum, steel, nickel and zinc are critical to the health of the world economy. They are used extensively in important industries such as construction, manufacturing, automotive and high-tech. Copper is particularly consequential today for several reasons.
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Copper is a highly versatile metal. It’s very malleable, meaning it can bend and be molded without sacrificing its strength or internal integrity. For many centuries copper has proven itself useful in cladding, roofing and plumbing. Since the dawn of the second industrial revolution, copper — an excellent conductor of electricity — has been used extensively for electrical wiring purposes where a high degree of strength, durability and flexibility are absolutely essential.
Additionally, copper conducts heat almost as well as it conducts electricity. This makes it an excellent choice for heating, refrigeration and many renewable energy technologies such as wind turbines, solar panels and electric vehicles (EVs).
Copper is looked at by many as something of an economic bellwether. When economies are healthy and growing, copper demand tends to increase. When economies are weak or are threatening a slowdown, copper consumption falls. For this reason, investors and economists use world copper consumption as a reliable economic indicator.
If you are among the many savvy investors who are bullish on a strong U.S. and world economy, and you understand what that could mean for copper and industrial metals, here’s a list of seven copper stocks to consider buying today:
— Southern Copper Corp. (ticker: SCCO)
— Glencore PLC (OTC: GLNCY)
— Freeport-McMoRan Inc. (FCX)
— Rio Tinto Group PLC (RIO)
— BHP Group Ltd. (BHP)
— Compañía de Minas Buenaventura S.A. (BVN)
— Metals Acquisition Ltd. (MTAL)
Southern Copper Corp. (SCCO)
SCCO is an $82 billion copper company with strong cash flows and good profitability. In fact, Wall Street estimates that SCCO will generate $11.2 billion in revenue in fiscal 2024 and will increase that by more than 13% to $12.7 billion in 2025. On the earnings front, analysts are looking for 30% earnings growth next fiscal year, with 2024’s earnings per share estimate of $4.06 surging to $5.28 by 2025.
SCCO has exploration, mining and mineral operations in Chile, Ecuador, Argentina, Mexico and Peru. Its significant copper division is involved in the mining, smelting and refining of copper ore to produce copper and other metallic by-products such as molybdenum and sulfuric acid. It also refines and sells the silver and gold it finds as a result of its industrial metals operations. Additionally, it has underground mines that produce zinc, lead and coal.
SCCO is a large firm. It claims to have ownership or other interests in more than 355,000 hectares of mining concessions. The company is based in Phoenix, Arizona.
Glencore PLC (OTC: GLNCY)
Making its headquarters in Baar, Switzerland, GLNCY is a $72 billion minerals company that produces, refines, processes, stores, transports and sells a wide range of industrial metals including, of course, copper.
The company operates chiefly in the Americas, Central and Eastern Europe, Asia and Africa as well as in the Oceania region that includes Australasia, Melanesia, Micronesia and Polynesia.
On top of its copper production, GLNCY is prominent in other important metals including cobalt, nickel, chrome ore, vanadium, aluminum and iron ore, to name just a few.
Interestingly, because of its ancillary but significant production of coal and crude oil, GLNCY could almost be classified as an energy company as well as a metals and mining firm.
Wall Street is looking for $243 billion in revenue for fiscal 2024 and $250 billion 2025, representing 2.8% year-over-year revenue growth. And while that won’t break any growth records, the business is stable enough to support a 2.2% dividend yield.
Freeport-McMoRan Inc. (FCX)
With a sterling reputation in the industry and a market cap of $68 billion, Freeport-McMoRan is an undisputed leader in minerals and mining. Though the company might be best known for its copper production, FCX is not exclusively a copper stock. This diversified mining company produces significant amounts of gold and silver, as well as the lesser known metal, molybdenum, which is used to enhance the strength and hardness of steel.
FCX is expected to release its next earnings report on July 18. Wall Street will be watching for that report with anticipation following FCX’s last quarterly report, in which the company beat consensus earnings by 13.2% and beat expected revenue numbers by 10.8%.
Zacks Investment Research is projecting earnings of 45 cents a share for the current quarter, which would reflect a year-over-year increase of 28.6%.
Freeport-McMoRan makes its headquarters in Phoenix, Arizona, but mines copper and other metals in several other locations around the world, most prominently in New Mexico, Colorado, South America and Indonesia.
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Rio Tinto Group PLC (RIO)
On April 24, BofA Research Analyst Jason Fairclough, published a research report in which he reiterated his “buy” rating and claimed RIO had a 25% potential 12-month return. “RIO appears undervalued and provides quality exposure to an expected increase in aluminum and copper prices,” Fairclough wrote.
If you’re not familiar with RIO, it’s a $108 billion global copper and mineral mining company that is based in London and trades on the New York Stock Exchange as an American depository receipt, or ADR.
On top of its copper operations, RIO is a major producer of important industrial metals like aluminum and iron ore, as well as the precious metals gold and silver. Its metals mining activities also allow RIO to produce large amounts of other geological products like salt and gypsum which it sells to refiners and producers.
RIO operates both open pit and underground mines and owns its own refineries, smelters, processing plants and shipping operations.
BHP Group Ltd. (BHP)
BHP has facilities and mining operations around the globe. Its mines and processing plants are located in Australia, Europe, Japan, China, India, North America and several other key locations around the world.
The company has three main segments: copper, iron and coal. But it produces much more than just those three natural resources.
BHP, which is based in Melbourne, Australia, also mines and refines silver, zinc, uranium and nickel. Further, it produces coal for energy consumption and potash for use in fertilizer manufacturing.
The company has been around since 1851 and, in the intervening years, has grown into the $147 billion powerhouse it is today. BHP is expected to generate $55 billion in revenue in 2024. Some of that revenue will go towards supporting the stock’s annualized dividend of $3.04 a share, which currently works out to a healthy 5.4% yield.
Compañía de Minas Buenaventura S.A. (BVN)
Most American investors have never heard of the Peruvian company BVN, but the firm is well known in the metals and mining sector. BVN has a market cap of $4.2 billion and, in addition to operations in its home country, also has highly productive mines in the U.S., Asia and Europe.
Copper is an important source of revenue for BVN but it is not the only metal the company relies on. BVN produces gold, silver, zinc and lead as well.
In an effort to further diversify its operations, BVN has developed a growing energy generation business and an insurance brokerage that seeks to serve the mining industry.
Analysts are forecasting $1.02 billion in revenue from the company in 2024, implying revenue growth of more than 23% this fiscal year.
Metals Acquisition Ltd. (MTAL)
MTAL is a copper mining company with a market cap of $1 billion. The company’s stated mission is to acquire and operate copper mines in what it feels are politically stable countries. MTAL is an environmentally conscious firm that says it is dedicated to global decarbonization in the foreseeable future.
MTAL’s core holding is the CSA Copper Mine in Cobar, Australia which it was able to acquire from Glencore PLC in the summer of 2023. The CSA Copper Mine is one of the largest employers in New South Wales, Australia and is a systemically important producer of copper in that part of the world. The mine also has a well-deserved reputation for producing an especially high grade of copper ore.
The company further benefits the environment and supplements its mining income by building and operating hydroelectric power plants near its mines and selling sustainable electricity to surrounding towns and villages.
Largely as a result of its CSA acquisition, analysts expect MTAL’s revenues to surge by 113% in fiscal 2024.
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7 Best Copper Stocks to Buy Now originally appeared on usnews.com
Update 06/13/24: This story was published at an earlier date and has been updated with new information.
