Industrial metal prices and a propensity for supply and demand constraints often fluctuate while keeping direction with the worldwide economy. Demand and price declines during periods of inflation and a recession generally affect the profitability and stock prices of businesses producing industrial metals. The usual suspects are responsible for impacting the health of these stocks: inflation, recession fears in tandem with aggressive monetary policy, crises overseas, and so on. That doesn’t mean that they cannot, or won’t, rebound. I’ll be writing a piece soon on how the long-time reliability of metals is only helping to improve modern-day technology, and there’s a sweet irony to be found in all of it.
Let’s get on the topic of precious metals. Fortunately for us, the price of precious metals typically has an inverse relationship with the state of the economy. This hints at an opportunity; right now, precious metals are getting more attention as we look to a new fiscal year. Most investors who purchase these metals discover the ability to safeguard their assets while enjoying what a haven the precious metals space turns out to be during inflation. When the pandemic induced lockdowns and quarantines in 2020, a group of investors flocked to precious metals. The circumstances are different but similar in that a need must be met. As we need metals for many things, we also need certain metals that happen to earn more money while helping to make genuine progress.
Let’s break down my three favorite stocks in precious metals currently; these represent companies gaining momentum and profitability, offering dividends to shareholders, and trading below fair value. Analysts agree we’re better off buying these tickers now:
Wheaton Precious Metals Corp (WPM)
Wheaton Precious Metals Corp. (WPM) is a Canadian and multinational precious metals streaming firm. WPM primarily offers deposits of gold, silver, palladium, and cobalt. WPM currently owns stakes in 23 active mines, not to mention those in various stages of development. In May 2017, the firm changed its name from Silver Wheaton Corp. to Wheaton Precious Metals Corp due to expanding its portfolio. WPM was established in 2004 and is based in Vancouver, Canada.
WPM currently has arrangements to acquire 21 working mines. Expansion means that WPM has earned its place in the industry. WPM is a top competitor in the precious metals market and currently offers deposits of silver, cobalt, gold, palladium, and other mining products. On paper, assets certainly have not been a problem for WPM. For its third fiscal quarter, WPM reported a net income of $196.46 million (+45.59% y/y) while also reporting $6.6 billion in total assets. WPM has a market value of $17.56 billion. WPM’s beta score of 0.42 shows it to be less volatile than the overall market, and its return on equity is 12.66%. WPM has a dividend yield of 1.55%, with a quarterly payout of 15 cents per share ($0.60 annually). Analysts that offer yearly pricing estimates have given WPM a consensus median price target of 47.74, with a high of 60.00 and a low of 37.45. This shows a 23.03% increase from its latest, and forecasts are optimistic regarding WPM’s buy rating.
Rio Tinto PLC (RIO)
Rio Tinto Plc (RIO) is a mineral resource mining and processing company. RIO‘s Iron Ore sector is responsible for the global seaborne iron ore commerce. RIO‘s Aluminium segment production produces bauxite, alumina, and primary aluminum. RIO also has a neat division called “Diamonds and Copper,” which appears to lean towards the more lucrative of its operations; Silver, gold, copper, diamonds, and various byproducts are what RIO primarily spends its time involved with. RIO was established in 1873 and is based in London, England. RIO is widely considered a pioneer in attempts to power aluminum plants using low-cost, carbon-free hydroelectricity.
I will look at RIO’s financial performance from the perspective of year-to-date numbers as of writing (December 2022). RIO has shown revenue of $60.19 billion and a gross profit of $31.34 billion. RIO displays good faith with its return on equity margin of 32.83% and a net profit margin of 29.39%. One can feel pretty secure with owning RIO, as it has a P/E ratio of 6.4x and a 0.68 beta measure. Things like this come in handy. What sets RIO apart in this grouping is its passive income; RIO currently has a dividend yield of 9.72%. This comes with a quarterly shareholder payout of $1.71 per share ($6.86 annually) and a nice payout ratio of 73.03%. Analysts that provide 12-month pricing forecasts have given RIO a consensus median price target of 74.95, with a high of 90.00 and a low of 64.50. The estimates with RIO have a recent history of aiming higher, and when you combine the bargain price with its dividend and upside potential, you get a solid buy rating.
Mueller Industries Inc (MLI)
Mueller Industries, Inc. (MLI) manufactures and distributes items that contain copper, brass, aluminum, and plastic in the U.S., the U.K., Canada, China, South Korea, the Middle East, and Mexico. MLI’s Piping Systems segment features copper tubes, fittings, and line sets. Steel pipes, brass and plastic plumbing valves, malleable iron fittings, faucets, and water tubes are also available from MLI. The metal manufacturer operates in several segments but is known chiefly for its Metals division, where MLI offers professional-grade metals for plumbing or building an outdoor staircase. MLI deals with metals, including: copper, copper alloy, brass, cold-formed aluminum, steel, stainless steel, cast iron ore, and bronze. MLI doesn’t forget to offer an inventory of accessories and additional products for utilizing their line of metals. MLI was founded in 1917, and it is headquartered in Memphis, Tennessee.
I’ll go into MLI’s impressive financials by continuing the year-to-date, as of writing (December 2022) approach. MLI’s P/E ratio is 5.75x, its debt to equity is 1.21, a return on equity margin of nearly 50%, and a market cap of $4 billion. For 2022, MLI’s $4.06 billion (so far, heh) in revenue is a decent leap from last year’s $3.8 billion and represents annual growth of 57.18%. Already boasting a forecasted $1.92 per share for this quarter, MLI can pride itself on the massive 234.74% EPS growth over last year. MLI just introduced the birth of a dividend very recently, and what it means for investors is a dollar per share each year, or 25 cents per share quarterly. The yield is 1.53%, for whatever it’s worth. From analysts that provide yearly price predictions, MLI has a consensus median target of 100.00. This forecast is decidedly a 52.93% increase over current pricing, and MLI’s buy rating should only gain support from here on.
Read Next – Have you seen it yet? Appalling…
This is causing a lot of controversy…
It’s a new documentary called The Two Men Destroying America.
And a lot of powerful people would rather this exposé never saw the light of day. Chances are, they’ll attempt to have it scrubbed from existence.
That’s because it tells the true (and terrifying) story of how two men from New York have engineered a reset of not just your personal wealth, but the entire US economic system.
and then