In this article, we discuss the 5 best copper stocks to buy now. If you want to read a detailed analysis of the copper market and its recent trends, go directly to the 10 Best Copper Stocks to Buy Now.
5. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 19
BHP Group Limited (NYSE:BHP) is an Australian mining company with a diverse portfolio. The company produces iron ore, copper, aluminum, uranium, nickel, metallurgic coal, thermal coal, zinc, manganese, gold, and diamonds. As of November 3, BHP Group Limited (NYSE:BHP) has a dividend yield of 14.03% with an annualized dividend payout of $21.
BHP Group Limited (NYSE:BHP) is one of the best copper stocks with a strong balance sheet. In the June quarter, the company was able to bring about a steep decline in debt from its previous $4.1 billion down to $300 million. BHP Group Limited (NYSE:BHP) also has some significant money-generating capabilities as it generated $26.3 billion in free cash flow in FY2022. Furthermore, the company exited the June quarter with a net cash position of approximately $800 million.
In early August, CLSA analyst Robert Stein downgraded BHP Group Limited (NYSE:BHP) from Buy to Outperform with a A$42.50 price target. Stein’s downgrade is owed to the recent strength in the company shares.
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4. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 24
Rio Tinto Group (NYSE:RIO) is a metals and mining company headquartered in London. The company produces aluminum, diamonds, gold, borates, titanium dioxide, salt, iron ore, and lithium and is among the best copper stocks. Rio Tinto Group (NYSE:RIO) pays its dividends semi-annually and has a massive dividend yield of 9.7% as of November 3.
On September 22, Rio Tinto Group (NYSE:RIO) signed a memorandum of understanding with Shougang Group, one of the world’s top steel producers, to promote research, design, and implementation of low-carbon solutions for the steel value chain. The company has a nearly 30-year relationship with Shougang Group as a trade and technical partner.
In Q2 2022, Fisher Asset Management increased its holdings in Rio Tinto Group (NYSE:RIO) by 6% and was the most prominent shareholder in the quarter. The firm owned over 14.8 million shares of the company, valued at $905.659 million.
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Follow Rio Tinto Plc (NYSE:RIO)
3. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE) is a Brazilian metals and mining company. The company produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt. Furthermore, the company also operates hydroelectricity plants.
Vale S.A. (NYSE:VALE) has seen some dark periods in the past, yet in the last five years, the company has done a commendable job to produce a stronger financial performance. From 2017 to the end of 2021, the company’s net income compounded by 32.43%, and its free cash flow margin increased to 52.1% from 34.5%. Furthermore, Vale S.A. (NYSE:VALE)’s enterprise value stands at $69.27 billion as of November 3 and has an FCF yield of over 40%.
On September 12, RBC Capital analyst Tyler Broda upgraded Vale S.A. (NYSE:VALE)’s shares from Sector Perform to Outperform and raised his price target to $16 from $15. The analyst anticipates a major catalyst for the company in Q4 2022.
Here is what Grantham Mayo Van Otterloo & Co. LLC had to say about Vale S.A. (NYSE:VALE) in its Q1 2022 investor letter:
“Let’s look at Vale (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”
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2. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 46
Teck Resources Limited (NYSE:TECK) is a Canadian diversified natural resources company. The company is engaged in mineral and mining development for coal, copper, and zinc. In addition, the company holds a small market share in lead, silver, gold, molybdenum, germanium, indium, and cadmium.
Teck Resources Limited (NYSE:TECK) is one of the best copper stocks because of the primary copper asset, Quebrada Blanca Mill 2 in Chile. Currently, 23% of the revenues of the company are generated from copper and are expected to reach 34% when the QB2 mill reaches its full potential in 2026. The Teck Resources Limited (NYSE:TECK)’s management is planning to open another mill which is expected to double the company’s copper output to 861kt copper equivalent and cash costs are expected to reduce significantly according to the company’s investor presentation.
Teck Resources Limited (NYSE:TECK) also focuses on shareholder returns through stock repurchases and dividends. The company has a 1.25% dividend yield with a current TTM payout of $0.38 as of November 3. Furthermore, the company announced a share repurchase program of $1 billion in April and July, out of which $800 million worth of shares still remain.
On November 3, RBC Capital analyst Sam Crittenden reaffirmed a Buy rating on Teck Resources Limited (NYSE:TECK) and lowered the price target to $52 from $60.
Here is what Greenlight Capital had to say about Teck Resources Limited (NYSE:TECK) in its Q2 2022 investor letter:
“Finally, Teck Resources (NYSE:TECK). The shares ended the quarter at $30.57. This is about 85% of book value and less than 4x consensus earnings. The company recently began buying back its shares. When the CEO was asked on the April 27th quarterly call what the plans were for playing his ‘really strong hand of cards here,’ he responded with, ‘I’d like to buy the whole company back myself.’”
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Follow Teck Resources Ltd (NYSE:TCK)
1. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 56
Newmont Corporation (NYSE:NEM) is a Colorado-based mining company that focuses on gold, copper, silver, zinc, and lead.
As of November 3, Newmont Corporation (NYSE:NEM)’s most attractive prospect is its handsome dividend yield of 5.27%. The company has been increasing its dividend for the last two years and has a payout ratio of 94.56%. The latest dividend was paid out on September 22 to the shareholders of record on August 9.
On September 6, UBS analyst Cleve Rueckert upgraded Newmont Corporation (NYSE:NEM) shares to Buy from Neutral. The analyst believes that the company should be able to pay its annual $2.20 dividend, which is within its commitment to return 40 to 60% of excess cash flow to shareholders.
According to the Insider Monkey database, hedge funds showed a positive sentiment towards Newmont Corporation (NYSE:NEM) in Q2 2022 with 56 hedge funds having a stake in the company, up from 53 in the previous quarter. GQG Partners was the most significant shareholder in the company in Q2 with over 34.78 million shares, worth over $2.076 billion.
Here is what First Eagle Investments had to say about Newmont Corporation (NYSE:NEM) in its Q2 2022 investor letter:
“Shares of Colorado-based Newmont, the largest gold miner in the world, experienced weakness in the quarter as falling gold bullion prices and cost inflation hurt miners in general. More idiosyncratically, the company reported slightly disappointing earnings and production results for its most recent quarter due to pandemic-related disruptions, ongoing supply-chain constraints, and labor shortages.
It also warned that operating costs for 2022 were likely to come in at the upper end of previous guidance. We remain constructive on the stock, which offers steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet, and proven management.”
You can also take a look at 15 Best Gambling Stocks To Buy and 10 Best Stocks For Dividends.
