Copper has been a hot topic in the stock market, and for good reason. As clean energy solutions continue to spread across the country, the demand for the electricity-conducting metal is growing dramatically. In fact, some experts suggest that copper demand will more than double by the year 2030.
If that proves to be the case, copper investors are in for significant gains.
As the law of supply and demand suggests, when demand climbs, the price typically follows. If the price of copper rises, the values of the companies that produce it are likely to rise as well. However, not all copper stocks are equal. Investors must compare their options when choosing the best copper stocks to buy.
What Is the Best Copper Stock?
With demand for copper expected to rise dramatically, countless investors may be looking for the best way to enter the market. However, not all stocks are equal, even when those stocks operate within the same sector. Investors must choose their investments wisely.
That can be difficult because, according to MiningFeeds, investors can choose from 178 publicly traded copper companies. Here’s a list of some of the best copper stocks to buy.
1. Freeport-McMoRan (NYSE: FCX)
Best for: Value investors interested in long-term copper investments
Freeport-McMoRan is one of the largest copper miners in the world, but that’s not the only metal it focuses on. The company is also a major producer of molybdenum and gold.
The stock hasn’t performed well as of late thanks to an expected near-term slowdown in copper demand, but that creates an opportunity. Long-term investors who are looking to bank on long-term demand growth can get in on this stock at a steep discount.
2. Fortescue Metals Group (OTCMKTS: FSUGY)
Best for: Risk-averse investors
Most experts tell investors to stay away from stocks that trade on over-the-counter markets because they’re typically small companies riddled with risk. Fortescue Metals doesn’t trade on the OTC market because it’s a small, risky company — it does so because it’s a foreign company headquartered in Perth, Australia. The company is one of the largest iron ore miners in the world.
So, why is it on a list of the best copper stocks? Fortescue Metals is heavily exposed to the copper industry thanks to its 19% ownership of Candente Copper Corporation. It’s also exploring new gold and copper assets of its own around the world.
Impressively, while the S&P 500 is down more than 18% over the last year, Fortescue Metal Group shares have only fallen 3.14%, highlighting the stock as a potential safe-haven play.
3. BHP Group (NYSE: BHP)
Best for: Income investors
BHP is the world’s largest mining company. The company’s core focus is on iron ore, but it’s also a major player in mining several metals, one of which is copper.
The company already has multiple copper mines around the world, but it’s looking to expand its presence in the copper mining industry as a shift in energy production leads to expected gains in demand.
The company is a solid dividend payer too. It has consistently paid dividends to investors since 1995 and shows no sign of changing that trend. The stock dividend yield is impressive too, currently sitting at 14.03%. It’s a strong option for income investors who want copper exposure.
4. Southern Copper (NYSE: SCCO)
Best for: Value investors looking for an international copper company
Founded in Delaware in 1952, Southern Copper Corp has grown to own the largest copper reserves in the world. The company’s name comes from the location of its first assets, South America and Peru, and it continues to operate in that region.
This is another stock that has taken a big hit due to the short-term expectations of decreasing demand, but that makes it another compelling option for value investors.
In the words of Warren Buffett, investors should be “fearful when others are greedy and greedy when others are fearful.” As copper stock prices fall due to short-term fears, opportunities are arising for long-term investors. Consider taking advantage of these discounts by investing in the copper sector.
Any hot topic on the stock market is typically met with quite a few questions. After all, the market is a battle between the bulls and the bears, resulting in ever-changing prices. Here are the answers to some of the most common questions about copper.
- Are copper stocks a good investment?
- A general statement that copper stocks are a good investment would be the wrong one to make – not all stocks are created equal. Investors should assess each investment on a stock-by-stock basis to determine whether or not a new investment fits well into their unique portfolios.
- Is copper a good investment in 2022?
- In general, copper is a good investment, especially when widespread market fears lead to undervaluations. However, it may not be a great investment for a specific investor’s portfolio. Before adding any investments to their portfolios, investors should do their research and consider how the new investment will affect their overall mix.
- Those who aren’t sure whether or not copper fits in their portfolio should consider speaking with a financial advisor before they make a move.
- Who is the biggest producer of copper?
- According to Statista, Codelco is the world’s largest copper producer by production. The company produced 1.7 million tons of copper in 2021. Freeport-McMoRan is in second place with 1.2 million tons produced, and Glencore produced 1.19 million tons in 2021.
Information is accurate as of Oct. 26, 2022, and is subject to change.
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