2 Copper Stocks To Buy: 1 For Dividends, 1 For Growth

Today we will talk about two copper stocks we have a bullish stance on. We believe Freeport-McMoRan Copper & Gold Inc (FCX) has a strong balance sheet, increasing cash flows, good dividend yield, and due to its cheap valuations, it is the best copper stock to play an economic rebound. Southern Copper Corporation (SCCO) has great value in its expansion projects, which we believe are not priced in the stock. Moreover, the stock has a very attractive dividend yield for dividend seeking investors.

FCX is trading at a forward P/E of 8.36, while SCCO is trading at 13.84. SCCO and FCX have PEG ratios of 1.39 and 3.35, respectively. SCCO has a sustainable dividend yield of around 10% per cent and a very attractive long term growth rate of 10 per cent as well.

In conclusion, as we said earlier, although copper prices are on a decline and inventory levels are high in China, we expect demand to improve in the near term. We believe that through a global accommodative policy environment by central banks, copper will outperform other LME metals. Read More