Mining companies, including Constellium SE, Copper Mountain Mining Corp., and BHP Group Ltd., are leading peers in revenue growth as a weaker U.S. dollar and growing economic uncertainty push up the price of gold and other precious metals.
The SPDR S&P Metals & Mining ETF (XME), a key benchmark, fell 20% in the past 12 months, compared with a 7% drop in the Russell 1000 Index.
Below we look at the top three mining stocks in three categories: the best value, the fastest growth, and the best performance. All data are as of April 14.
Best Value Mining Stocks
These are the mining stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
| Best Value Mining Stocks | |||
|---|---|---|---|
| Price ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
| Ferroglobe PLC (GSM) | 4.47 | 0.8 | 1.8 |
| Arch Resources Inc. (ARCH) | 128.36 | 2.2 | 2.0 |
| Alpha Metallurgical Resources Inc. (AMR) | 161.98 | 2.4 | 2.1 |
Source: YCharts
- Ferroglobe PLC: Ferroglobe is a U.K.-based supplier of silicon and manganese-based alloys used for various products, from personal care items to electronics and construction materials. Falling prices cut into earnings in the final quarter of 2022. A 21% drop in revenue year-over-year led to a 45% decline in net income for the quarter. Ferroglobe shares have lost more than 50% of their value in the past year.
- Arch Resources Inc.: Arch Resources sells metallurgical products, with four metallurgical mines in West Virginia and two low-cost thermal coal mines in Wyoming and Colorado. On Feb. 16, the company released earnings for the fourth quarter with net income that more than doubled due to an income tax benefit of $253.3 million, on top of a slight increase in revenue year-over-year.
- Alpha Metallurgical Resources Inc.: Alpha Metallurgical Resources is a mining company that supplies metallurgical products to the steel industry. The company extracts, processes, and markets coal for sale to steel and coke producers, electric utilities, and industrial clients. It has operations in Virginia and West Virginia. Net income fell 14% in the fourth quarter of 2022, while revenue was unchanged from the previous year. The company authorized a $1.2 billion stock buyback program in 2022. As of Jan. 31. the company had repurchased 3.8 million shares for approximately $560 million.
Fastest Growing Mining Stocks
These are the top mining stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest Growing Mining Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Constellium SE (CSTM) | 14.19 | 2.0 | 258 | -3 |
| Copper Mountain Mining Corp. (CMMC.TO) | CA$2.26 | CA$0.5 | 218 | -34 |
| BHP Group Ltd. (BHP) | 62.39 | 157.9 | 189 | 49 |
Source: YCharts
- Constellium SE: Constellium is a France-based producer of aluminum alloy products for the aerospace, automotive, and packaging industry.
- Copper Mountain Mining Corp.: Copper Mountain Mining explores and develops mineral properties within British Columbia, such as the Cooper Mountain Mine, of which the company holds 75% ownership. The company appointed Patrick Merrin as President and CEO in March, effective late April. Copper Mountain also sold its wholly-owned Eva Copper Project and 16 exploration tenements in Queensland, Australia, to Harmony Gold Mining Co. for $230 million. The company trades OTC in the U.S. under the ticker CPPMF.
- BHP Group Ltd.: BHP is an international resource company in Australia that owns and operates copper, gold, nickel, and metallurgical coal mines in North America, Australia, and South America.
Mining Stocks with the Most Momentum
These are the mining stocks that had the highest total return over the last 12 months.
| Mining Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Patriot Battery Metals Inc. (PMET.V) | CA$13.00 | CA$1.3 | 713 |
| Snowline Gold Crop. (SGD.CN) | CA$2.80 | CA$0.4 | 133 |
| Sigma Lithium Corp. (SGML) | 37.20 | 3.9 | 130 |
| Russell 1000 Index | N/A | N/A | -6 |
| SPDR S&P Metals & Mining ETF (XME) | N/A | N/A | -20 |
Source: YCharts
- Patriot Battery Metals Inc.: Patriot Battery Metals, formerly known as Gaia Metals Corp., is a Canada-based precious metals mining company. It focuses on acquiring and developing projects involving precious metals, battery metals, and similar resources. The company trades OTC in the U.S. under the ticker PMETF.
- Snowline Gold Corp.: Snowline Gold is a gold exploration company with multiple properties located in the Yukon in northwestern Canada. On March 28, Snowline and B2Gold completed an agreement by which B2Gold invested CA$19.2 million to purchase approximately 4 million common shares of Snowline Gold, making B2Gold a 5% owner of Snowline.
- Sigma Lithium Corp.: Sigma Lithium is a Canadian mineral development company focusing on hard rock lithium deposits. It produces low-carbon, high-purity lithium concentrates for the electric vehicle industry.
How to Analyze Mining Stocks
Mining companies are unique in that their growth is limited by the assets available to them in their mining properties. The major issue for investors is that mining companies do not know exactly how much of each target asset is available until they’ve spent the time and money to mine those properties. Evaluating and exploring properties is expensive.
Mining companies engage in drilling and exploration to establish data about these reserves and resources, which in turn contributes to the valuations of those companies. Investors in the mining sector should be prepared to evaluate information that the companies offer about reserves and longterm viability of their projects. Mining companies publish valuations of their projects, but experienced investors know that these valuations often factor in a number of assumptions.
Advantages of Mining Stocks
Mining companies target natural resources used in a tremendous array of products and industries. Because these natural resources cannot be grown or produced in other ways, the mining industry is likely to prosper as long as these resources are in demand. Additionally, the mining industry offers investors a wide variety of both established mining companies and smaller junior companies. Each company offers a different risk-reward opportunity for investors. Finally, as the natural resources that mining companies target become more scarce, the price of those resources may increase, potentially adding to those companies’ profits.
Source: https://www.investopedia.com/top-mining-stocks-q2-2023-7481284?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo