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4 Metals Stocks for a Long-Term Investment

Originally published on Best Stocks

Category: best stocks to buy now

When the markets are volatile, and investors become skittish, stocks of companies that produce metals tend to suffer. However, when the market is stellar, as was seen in 2014 and again in 2016, shares of these firms thrive. In addition to being cyclical, the metals industry has various sub-sectors. For example, while aluminum manufacturers are often grouped with other metal producers, they differ quite from steel producers. Each sub-sector has positives and negatives that an investor needs to understand before buying shares of any particular company within that sub-sector. Given this dynamic environment for a stock picker, you may be wondering which metal stocks would be best for long-term investment at this time. This article will look at four metals stocks that should fare well over the next five years or more.

Cleveland-Cliffs (CLF)

Cleveland-Cliffs is the largest producer of iron ore in the United States. The company has been producing iron ore for over 100 years and is the fifth-largest iron ore producer in the world. Iron ore is the primary ingredient used in the production of steel. Cleveland-Cliffs has operations in both the Midwest and Southeastern U.S. The company’s iron ore operations are located in Minnesota and adjacent to Wisconsin. The company also has operations in Alabama, Tennessee, and Virginia. Cleveland-Cliffs has two mines in Minnesota and one mine in Wisconsin. The company also has five iron ore pellets plants and two iron ore fines plants in the U.S. The company also has a joint venture in Brazil that produces iron ore pellets and fines. Iron ore prices have decreased since 2016 but have recently shown signs of bottoming, indicating a mini-rally in the sector. Cleveland-Cliffs has a market capitalization of $3.63 billion.

Teck Resources (TECK)

Teck Resources is a Canadian mining company that produces metallurgical coal, copper, zinc, gold, and silver. The company also has various exploration and development projects in various countries. In addition to producing and mining various commodities, Teck also operates ten coal-fired power plants in Canada. Due to their ownership of these power plants, Teck has generated a significant portion of its revenues from their power business. Teck Resources operates in Canada, the United States, Chile, and the Philippines. In Canada, Teck produces metallurgical coal and copper. The company also has zinc and gold assets in Canada. Teck produces metallurgical coal, copper, and zinc in the United States. The company also has gold operations in the Philippines. Metallurgical coal is used in steel production and has been experiencing a significant increase in demand that helped support its price. Teck Resources has a market capitalization of $5.96 billion.

B2Gold (BTG)

B2Gold is a gold producer in the Philippines, Brazil, and Nicaragua. The company has been producing gold since 2013 and has grown its production each year since beginning operations. B2Gold recently acquired project properties in the Philippines that have the potential to increase their gold production by up to 15% per year. This acquisition could boost B2Gold’s production to over 400,000 ounces of gold per year. Gold is a precious metal that has been trending higher since 2016. The yellow metal has also been increasing steadily since bottoming in October 2016. The equity market has also been rising recently, indicating that the worst of the 2018 downturn is in the rearview mirror. B2Gold has a market capitalization of $1.31 billion.

Harmony Gold Mining Company (HMY)

Harmony Gold Mining Company is an Australia-based mining company that produces gold, copper, and other minor metals. Harmony Gold operates six mines in South Africa and one in the Philippines. The company has been producing gold for over 30 years and copper for over 15 years. The price of gold has been trending higher since bottoming in December of 2016 and has increased significantly since the beginning of 2016. The price of copper has also been trending higher since 2015. Much like iron ore, copper’s demand for various goods has also been increasing. Harmony Gold has a market capitalization of $5.93 billion.

Conclusion

These are a few metals stocks that should fare well over the next few years. While the metals market is cyclical, these companies have grown their revenues and profits in various market conditions. Moreover, these stocks are best for long-term investment due to their strong financial position and the strength of their underlying industries. As a result, these companies should continue to perform well in rising and falling markets.

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