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Metals and mining stocks have been among the worst-performing equity segments in the past decade. Various market headwinds have weighed on miners, including a slowing global economy and trade tensions. The recent bear market has left many investors questioning whether this is the right time to buy metals and mining stocks. However, the industry remains an integral part of the world economy. Moreover, several metals and mining stocks can offer value at current prices. In this article, we will discuss some of the best metals & mining stocks to buy now to profit from this beaten segment in 2022.
Barrick Gold (GOLD)
Barrick Gold is one of the world’s largest gold producers. The company mines gold in its Americas, Australia, and Africa operations. Barrick also holds several exploration assets, including the large Porcupine project in Canada. Barrick Gold has a strong balance sheet, with no long-term debt and $2.2B in cash. The company is expected to produce around 2.5-2.7Moz of gold in 2022. Barrick Gold trades at a forward P/E of 7.6x and has an expected dividend yield of 3.7%. In addition, the company’s stock has underperformed gold bullion by around 25% over the past year. As a result, Barrick Gold’s stock is an excellent long-term bet on gold prices.
MP Materials (MP)
MP Materials is one of the largest producers of silicon in the world. The company has operations in North America, South America, and Asia. Silicon is an essential raw material used in the semiconductor industry. MP Materials is well-positioned to benefit from the rising demand for semiconductors and electric vehicles. The company has several growth projects that will help sustain its high-single-digit growth. MP Materials trades at a forward P/E of 18.9x and has an expected dividend yield of 2.6%. The company has underperformed the S&P 500 Index by around 36% over the past year. MP Materials is a solid play on the semiconductor industry and can be an excellent long-term investment at current prices.
Gerdau (GGB)
Gerdau is one of the largest steelmakers in Brazil and the rest of South America. The company’s operations also span across North America and Europe. Gerdau is a low-cost producer with a significant market share in Brazil. The company’s long-term growth ambitions include expanding its operations in the United States. Steel demand continues to be strong, driven by rising infrastructure investment and an increasing appetite for construction. Gerdau has an excellent balance sheet, with no long-term debt and $1.1B in cash. The company trades at a forward P/E of 10.4x and has an expected dividend yield of 5.5%. Gerdau has underperformed the S&P 500 Index by around 10% over the past year. As a result, the stock is an excellent long-term bet on the global steel industry.
Mechel PAO (MTL)
Mechel is one of the largest diversified coal and steel companies in Russia. The company’s operations span Asia, Central and South America, and Europe. Mechel produces coal and iron ore, besides holding several energy assets like hydroelectric power plants. The company reported strong financial results in its latest quarter. Mechel’s earnings were up around 80% year-over-year. The company’s earnings are expected to grow at a healthy double-digit rate in the coming years. Mechel’s stock has underperformed the S&P 500 Index by around 40% over the past year. The company trades at a forward P/E of 8.8x and has an expected dividend yield of 4.4%. Mechel PAO is a solid investment option in the beaten-down metals and mining sector.
Conclusion
Metals and mining stocks have been among the worst-performing equity segments in the past decade. Various market headwinds have weighed on miners, including a slowing global economy and trade tensions. The recent bear market has left many investors questioning whether this is the right time to buy metals and mining stocks. However, the industry remains an integral part of the world economy. Moreover, several metals and mining stocks can offer value at current prices. In this article, we will discuss some of the best metals & mining stocks to buy now to profit from this beaten segment in 2022.
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