In this article, we will look at 10 commodities stocks that pay dividends.
The commodities market has been extremely volatile ever since the coronavirus pandemic struck the world. Gold prices peaked, and oil prices plummeted during early 2020. As we progressed into 2021 and governments around the world started easing lockdown restrictions which resumed supply-chain operations, commodity prices started gaining.
According to the World Bank’s 2021 Commodity Markets Outlook, energy prices that were expected to gain an 80% on average in 2021, will keep soaring till the first half of 2022. The report also suggested that agriculture and metal prices will decline in 2022, as supply constraints ease, after recording high gains in 2021. Crude oil prices were forecasted to be $74 per barrel in 2022, up from an expected $70 per barrel in 2021, and metal prices were expected to dip by 5% in 2022 after marking a 48% gain in 2021. However, it was not known up till this point that Russia will declare war on Ukraine which will result in an extremely volatile market situation.
The Ukraine conflict has resulted in all-time-high inflation and soaring commodity prices around the world. On February 24, 2022, the Russian president declared war on Ukraine. Within two weeks of this statement, Crude oil peaked at $130.50 per barrel, mirroring the 2008 financial crisis, and gold prices soared to $2000 per ounce. Nickel was pushed to trading over $100,000 per tonne, up from $25,000, after which it floored at $80,000 on the London Metal Exchange. Copper reached record-highs of $10,070 per tonne.
Given the current situation of the commodities market, commodity stocks are expected to gain as we move into 2022. We compiled a list of 10 commodities stocks that pay dividends. Some of the most popular commodities stocks, that have handsome dividend yields to offer, include Vale S.A. (NYSE:VALE), Rio Tinto Group (NYSE:RIO), LyondellBasell Industries NV (NYSE:LYB), and Southern Copper Corporation (NYSE:SCCO).
Photo by Jeremy Bezanger on Unsplash
Our Methodology
To determine 10 commodities stocks that pay dividends we scoured Reddit forums and saw which stocks are most popular among the Reddit community. We narrowed down our selection to commodity stocks that are popular and also have dividend yields of at least 2%. Along with the dividend yield, we also mentioned the hedge fund sentiment and analyst rating for each stock.
Without further ado, let’s take a look at 10 commodities stocks that pay dividends.
10 Commodities Stocks That Pay Dividends
10. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 45
Forward Dividend Yield as of March 18: 2.86%
Newmont Corporation (NYSE:NEM) engages in the production and exploration of gold, copper, silver, zinc, and lead. The stock is gaining popularity among investor circles. Insider Monkey’s data shows that 45 hedge funds were bullish on Newmont Corporation (NYSE:NEM) by the close of Q4 2021. The stakes of these funds topped $1.39 billion. This is compared to 48 positions in the third quarter of 2021, with a total stake of $774.45 million.
On February 24, 2022, Newmont Corporation (NYSE:NEM) announced that its earnings per share for the fiscal fourth quarter of 2021 came to $0.78, beating expert estimates by $0.01. The company’s revenue was reported at $3.39 billion, beating estimates by $13.58 million.
This March, Jefferies analyst Christopher LaFemina raised his price target on Newmont Corporation (NYSE:NEM) to $72 from $67 and maintained a Hold rating on the shares. As of March 18, 2022, the stock has a forward yield of 2.86% and has gained 19.43% over the past twelve months.
As of March 17, 2022, First Eagle Investment Management owns the most shares of Newmont Corporation (NYSE:NEM). The fund’s stakes in the company are valued at $1.08 billion, which accounts for 2.7% of First Eagle Investment Management’s Q4 2021 investment portfolio.
Newmont Corporation (NYSE:NEM) is a commodity stock that offers handsome dividend yields. Other commodity stocks with impressive yields include Vale S.A. (NYSE:VALE), Rio Tinto Group (NYSE:RIO), LyondellBasell Industries NV (NYSE:LYB), and Southern Copper Corporation (NYSE:SCCO).
First Eagle Investment Management published its third-quarter 2021 investor letter in which it mentioned Newmont Corporation (NYSE:NEM). Here’s what the firm had to say:
“The largest gold miner in the world, Newmont shares lost ground in what was a volatile and ultimately down quarter for the price of gold. The Colorado-based company has continued to execute well in what has been a challenging environment. The company recently reaffirmed its full-year 2021 production guidance, but indicated that it was likely to come in at the mid to low point of the range provided as a result of disruptions from Covid-19 as well as severe weather events. It also noted that inflation pressures were likely to push its costs higher in 2021. None of this changes our opinion of the stock, which has historically offered steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet and proven management.”
9. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Forward Dividend Yield as of March 18: 3.32%
Chevron Corporation has operations in integrated energy and chemicals worldwide. This March, the company announced its plans of acquiring Renewable Energy Group, Inc. (NASDAQ:REGI) for $3.15 billion, at $61.50 per share.
On March 9, 2022, Barclays analyst Jeanine Wai raised her price target on Chevron Corporation (NYSE:CVX) to $183 from $148 and reiterated an Overweight rating on the shares.
On January 1, 2022, Chevron Corporation (NYSE:CVX) announced that its earnings per share for the fiscal fourth quarter of 2021 amounted to $2.56. The company’s revenue for the quarter grew by 90.64% year over year, and came to $48.13 billion, beating expert estimates by $2.83 billion.
Chevron Corporation (NYSE:CVX) was spotted on 53 investment portfolios at the close of the fourth quarter of 2022. The total value of these stakes came to $6.50 billion, compared to 51 positions in the prior quarter with total stakes equaling $4.44 billion. Chevron (NYSE:CVX) has been gaining popularity among investor circles and has a positive hedge fund sentiment.
As of March 18, 2022, Berkshire Hathaway is the majority shareholder in Chevron Corporation (NYSE:CVX), having stakes worth $4.48 billion.
Goehring & Rozencwajg Associates mentioned Chevron Corporation (NYSE:CVX) in its third-quarter 2021 investor letter. Here’s what the firm had to say:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
8. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 41
Forward Dividend Yield as of March 18: 3.32%
On March 10, 2022, JPMorgan analyst Christyan Malek raised the price target on Shell plc (NYSE:SHEL) to 2,600 GBP from 2,500 GBP and reiterated an Overweight rating on the shares.
On February 3, 2022, Shell plc (NYSE:SHEL) announced that its EPS for the fourth quarter of 2021 came to $1.66, beating estimates by $0.41. The company’s revenue for the quarter saw an upside, grew by 93.87% year over year, and was valued at $85.28 billion.
As of March 18, 2022, Shell plc (NYSE:SHEL) has a forward dividend yield of 3.32% and has gained 21.93% over the past twelve months.
Fisher Asset Management is the lead shareholder in Shell plc (NYSE:SHEL) as of the fourth quarter of 2021. The fund’s stakes in the company came to $813.12 million, which covers 0.45% of Mr. Fisher’s Q4 2021 investment portfolio.
By the end of the fourth quarter of 2021, Shell plc (NYSE:SHEL) was spotted on 41 investment portfolios. The total stake of these funds in the company came to $2.63 billion. This is compared to $2.05 billion in the prior quarter with 33 positions. It can be concluded that the hedge fund sentiment around Shell plc (NYSE:SHEL) is positive.
Here’s what Goehring & Rozencwajg Associates had to say about Shell plc (NYSE:SHEL) in its third-quarter 2021 investor letter:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Royal Dutch Shell must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell plc (NYSE:SHEL) spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what is has already promised, sell assets, and prioritize return of cash to shareholder which can be reallocated into low-carbon areas of the market.”
Shell plc (NYSE:SHEL) has already cut spending dramatically over the last decade. After having peaked at $39 bn in 2013, upstream capital spending fell to only $17 bn in 2020 – a drop of nearly 60%. Spending has barely recovered in the three quarters of 2021. A lack of spending has already impacted production. Proforma for the 2016 acquisition of BG Group, Shell plc (NYSE:SHEL)’s total production has fallen 13% since capital spending peaked in 2013. These trends are accelerating: Shell’s production over the first nine months of 2021 have fallen 7% compared with the same period last year.
If Royal Dutch Shell’s upstream capital spending remains at today’s depressed levels, we estimate the company will only be able to replace 30% of production with new reserves and that production will fall 40% over the next nine years. If spending is further curtailed (as is being proposed), Shell plc (NYSE:SHEL)’s oil and natural gas production would collapse – something that may have already started.”
7. B2Gold Corp. (NYSE:BTG)
Number of Hedge Fund Holders: 20
Forward Dividend Yield as of March 18: 3.49%
B2Gold Corp. (NYSE:BTG) operates as a gold producer with three operating mines in Mali, the Philippines, and Namibia. This February, B2Gold Corp. (NYSE:BTG) announced earnings for the fiscal fourth quarter of 2021, in which the company’s earnings beat revenue by $1.11 million. The company reported earnings per share of $0.11 and generated revenues that amounted to $526.11 million. Moreover, B2Gold Corp. (NYSE:BTG) marked its 13th consecutive year of beating its record annual total gold production for the fiscal year 2021 The company’s annual gold production exceeded 1.05 million ounces in 2021.
On February 23, 2022, B2Gold Corp. (NYSE:BTG) announced that its board of directors had declared a quarterly cash dividend of $0.04 per share, payable on March 17 to shareholders of record on March 9. As of March 18, The stock has a forward yield of 3.49% and has gained 22.38% over the past six months.
Insider Monkey spotted B2Gold Corp. (NYSE:BTG) on 20 hedge fund portfolios at the end of the fourth quarter of 2021, having stakes totaling $243.46 million. This is compared to 16 hedge funds in the previous quarter, with stakes worth $176.37 million. The hedge fund sentiment for the stock is therefore positive.
Renaissance Technologies is the largest stakeholder in the company as of February 23, 2022. The fund has stakes in excess of $130.34 million in B2Gold Corp. (NYSE:BTG), which covers 0.16% of Renaissance Technologies’ fourth-quarter 2021 13F portfolio.
Like Vale S.A. (NYSE:VALE), Rio Tinto Group (NYSE:RIO), LyondellBasell Industries NV (NYSE:LYB), and Southern Copper Corporation (NYSE:SCCO), B2Gold Corp. (NYSE:BTG) is gaining investor’s and analyst’s attention in 2022.
6. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Forward Dividend Yield as of March 18: 4.15%
Exxon Mobil Corporation (NYSE:XOM) operates as an integrated oil and gas company, based in Texas, United States. By the end of the fourth quarter of 2021, Insider Monkey identified 71 hedge funds that held stakes worth in excess of $5.3 billion in Exxon Mobil Corporation (NYSE:XOM). This is compared to 64 positions in the prior quarter with stakes worth $4.6 billion.
This February, Exxon Mobil Corporation (NYSE:XOM) released its Q4 2021 earnings, in which the company beat on both EPS and revenue. The company’s earnings per share were valued at $2.05, beating estimates by $0.11. Exxon Mobil Corporation (NYSE:XOM) reported its revenue for the quarter at $84.97 billion, up 82.56% year over year, beating estimates by $6.24 billion.
GQG Partners has the largest stakes in Exxon Mobil Corporation (NYSE:XOM) as of March 18, 2022. The fund’s stakes in the company are a whopping $1.98 billion, which makes up for 4.91% of the fund’s 13F portfolio.
As of March 18, 2022, the stock has a forward dividend yield of 4.15% and has gained 46.45% over the past six months.
This March, Barclays analyst Jeanine Wai raised her price target on Exxon Mobil Corporation (NYSE:XOM) to $98, up from $91, and maintained an Overweight rating on the shares.
Harding Loevner mentioned Exxon Mobil Corporation (NYSE:XOM) in its first-quarter 2021 investor letter. Here’s what they had to say:
“We felt that our remaining energy holding, Exxon Mobil Corporation (NYSE: XOM), with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While Exxon Mobil Corporation (NYSE: XOM) does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our Exxon Mobil Corporation (NYSE: XOM) holdings.”
5. Enviva Inc. (NYSE:EVA)
Number of Hedge Fund Holders: 5
Forward Dividend Yield as of March 18: 4.24%
Enviva Inc. (NYSE:EVA) is the world’s largest producer of industrial wood pellets, which are used as an energy source to generate heat and electricity. On March 7, 2022, RBC Capital analyst Elvira Scotto raised his price target on Enviva Inc. (NYSE:EVA) to $85 from $78 and maintained an Outperform rating on the shares.
On January 19, 2022, Enviva Inc. (NYSE:EVA) announced a stock offering of 4.3 million shares of common stock. The stock offering was priced a day after, on January 20, at $70 per share. The company granted underwriters an overallotment option to purchase an additional 645,000 shares.
On February 28, 2022, Enviva Inc. (NYSE:EVA) declared a quarterly cash dividend of $0.86 per share, payable by February 25 to shareholders of record on February 14. The stock’s forward yield as of March 18, 2022, is 4.24% and the stock has gained 54.81% over the past twelve months.
Enviva Inc. (NYSE:EVA) was a part of 5 hedge fund portfolios by the end of the fourth quarter of 2021. The total stakes of these funds were valued at roughly $423.05 million, up from $341.70 million in the previous quarter with 8 positions.
Jeff Ubben’s Inclusive Capital is the dominating shareholder in Enviva Inc. (NYSE:EVA) as of Q4 2021. The fund’s stakes in the company amounted to $402.37 million, which covers 41.17% of Inclusive Capital’s 13F portfolio.
4. LyondellBasell Industries NV (NYSE:LYB)
Number of Hedge Fund Holders: 35
Forward Dividend Yield as of March 18: 4.37%
This February, BMO Capital analyst John McNulty raised his price target on LyondellBasell Industries NV (NYSE:LYB) to $103 from $95 and maintained a Market Perform rating on the stock.
On February 25, 2022, LyondellBasell Industries NV (NYSE:LYB) declared a quarterly cash dividend of $1.13 per share. The dividend was payable on March 14, 2022, to shareholders of record on March 7, 2022.
As of March 18, 2022, LyondellBasell Industries NV (NYSE:LYB) has a forward yield of 4.37% and has gained 13.91% over the past six months. Eagle Capital Management is the majority stakeholder in the company as of the fourth quarter of 2021. The fund’s stakes in the company amounted to $281.68 million, which makes up for 0.84% of Eagle Capital’s 13F portfolio.
Investors are bullish on LyondellBasell Industries NV (NYSE:LYB). As of the fourth quarter of 2021, 35 hedge funds held stakes in the company, which were worth $778.62 million, up from $676.59 million in the previous quarter when 39 hedge funds held stakes in the company.
Miller Howard Investments, an investment management firm, mentioned LyondellBasell Industries NV (NYSE:LYB) in its third-quarter 2021 investor letter. Here’s what the firm had to say:
“We initiated a position in LyondellBasell (LYB). Chemical markets are currently robust given the combination of 2020 plant shutdowns and strongly recovering demand. Despite the tailwinds, Lyondell trades at a low valuation and yields just under 5%.”
3. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 19
Forward Dividend Yield as of March 18: 5.40%
This February, Southern Copper Corporation (NYSE:SCCO) announced its earnings for the fiscal fourth quarter of 2021, in which the company beat on revenue by $39.64 million. Southern Copper Corporation (NYSE:SCCO) reported earnings per share of $1.08. The company’s revenue saw an upside of 20.12% year over year and went up from $2.35 billion to $2.82 billion.
As of March 18, 2022, Southern Copper Corporation (NYSE:SCCO) has gained 30.64% over the past six months and has a forward dividend yield of 5.40%.
By the end of the fourth quarter of 2021, 19 hedge funds held stakes in Southern Copper Corporation (NYSE:SCCO). The total value of these stakes exceeded $440.2 million. Of these, Ken Fisher-led Fisher Asset Management was the dominating shareholder, having stakes of $221,811,000 in the company. The investment covers 0.12% of the fund’s fourth-quarter 2021 investment portfolio.
On December 9, 2021, Southern Copper Corporation (NYSE:SCCO) was upgraded to Equal Weight from Underweight by Morgan Stanley analyst Carlos De Alba. The analyst reiterated his price target of $55 on the stock.
2. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 22
Forward Dividend Yield as of March 18: 10.90%
Rio Tinto Group (NYSE:RIO) in involved in the exploration, mining, and processing of mineral resources worldwide. On March 14, 2022, Rio Tinto Group (NYSE:RIO) announced its plans to acquire 49% of the issued and outstanding shares of Turquoise Hill (NYSE:TRQ) at Canadian $34 in cash per share. The all-cash transaction is bet at $2.7 billion.
This March, Jefferies analyst Christopher LaFemina raised his price target on Rio Tinto Group (NYSE:RIO) to $92 from $86 and reiterated a Hold rating on the shares.
As of March 11, 2022, Fisher Asset Management is the majority stakeholder in Rio Tinto Group (NYSE:RIO), having stakes amounting to $907.2 million. The investment covers 0.5% of the fund’s Q4 2021 investment portfolio.
Rio Tinto Group (NYSE:RIO) is gaining popularity among investor circles. At the close of the fourth quarter of 2021, Insider Monkey identified 22 hedge funds having stakes in Rio Tinto Group (NYSE:RIO) worth in excess of $1.83 billion. This is compared to 20 positions in the third quarter of 2021, with stakes worth $1.33 billion. It can be concluded from these numbers that the hedge fund sentiment around the stock is positive.
1. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 25
Forward Dividend Yield as of March 18: 13.96%
Vale S.A. (NYSE:VALE) produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through two segments: Ferrous Minerals and Base Metals. This March, Deutsche Bank analyst Liam Fitzpatrick raised his price target on Vale S.A. (NYSE:VALE) to $20 from $19 and reiterated a Buy rating on the shares.
Vale S.A. (NYSE:VALE) was a part of 25 hedge fund portfolios by the end of the fourth quarter of 2021. The total stakes of these funds in the company equaled $1.71 billion. Of these 25 hedge funds, Fisher Asset Management is the majority shareholder in the company as of the close of Q4 2021. The fund’s stake in Vale S.A. (NYSE:VALE) is valued at $434.32 million, which makes up for 0.24% of Fisher Asset Management’s investment portfolio.
Miller Value Partners shared its insights on Vale S.A. (NYSE:VALE) in the firm’s Q3 2021 investor letter. Here’s what Miller Value had to say:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
You can also take a look at 10 Best Commodity Stocks To Buy Now and 10 Best Precious Metals Stocks To Buy
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Disclose. None. 10 Commodities Stocks That Pay Dividends is originally published on Insider Monkey.
