S&P 500   5,088.80
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3 Chinese stocks poised for rebound
S&P 500   5,088.80
DOW   39,131.53
QQQ   437.51
4 stocks benefitting from NVIDIA's explosive growth
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Analysts boosted Snowflake stock, big firms are buying now
First it was Tyson stock, now this food company is set to rally
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Is CRISPR Therapeutics the NVIDIA of gene editing?
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
6 reasons to buy Teva Pharmaceuticals stock sooner than later
3 Chinese stocks poised for rebound
S&P 500   5,088.80
DOW   39,131.53
QQQ   437.51
4 stocks benefitting from NVIDIA's explosive growth
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Analysts boosted Snowflake stock, big firms are buying now
First it was Tyson stock, now this food company is set to rally
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Is CRISPR Therapeutics the NVIDIA of gene editing?
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
6 reasons to buy Teva Pharmaceuticals stock sooner than later
3 Chinese stocks poised for rebound
S&P 500   5,088.80
DOW   39,131.53
QQQ   437.51
4 stocks benefitting from NVIDIA's explosive growth
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Analysts boosted Snowflake stock, big firms are buying now
First it was Tyson stock, now this food company is set to rally
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
Is CRISPR Therapeutics the NVIDIA of gene editing?
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Blue Chips And Billionaires Quietly Investing In "The New Oil" (Ad)
6 reasons to buy Teva Pharmaceuticals stock sooner than later
3 Chinese stocks poised for rebound

Should You Buy These Copper Stocks Ahead Of Monster Demand?

Copper StocksGlobal demand for copper is soaring, but does that put suppliers like Freeport-McMoRan NYSE: FCX, Teck Resources NYSE: TECK and Southern Copper NYSE: SCCO in a position to rally? 

Copper is a crucial component in several areas poised for growth: Electric vehicles, wind and solar power, and the infrastructure to store and transport renewable energy. 

But according to a July report by S&P Global, there’s a chronic gap between worldwide copper supply and demand. S&P’s report says this “will have serious consequences across the global economy and will affect the timing of Net-Zero Emissions by 2050.”

The report's authors add, “This study finds that copper supply shortfalls begin in 2025 and last through most of the following decade.”

They cite eight operational challenges that will affect copper producers in the coming years:

  • Infrastructure constraints
  • Permitting and litigation 
  • Local stakeholders
  • Environmental standards
  • Taxes and regulation
  • Politicization of contracts
  • Labor relations
  • Industrial strategies

As you see, there are plenty of obstacles looming, just at a time when demand for copper is increasing and is expected to almost double by 2035. 


In addition, according to the report, “Demand from nonenergy transition end markets—such as building construction, appliances, electrical equipment, and brass hardware and cell phones, as well as expanding applications in communications, data processing, and storage—is also expected to continue to grow, rising at a compounded annual rate of 2.4% between 2020 and 2050.”

So considering all the opportunities and challenges, should investors be considering copper producers?

Freeport McMoRan, which is tracked in the S&P 500, is up 6.84% in the past month, but that recent gain obscures the stock’s struggles since April. 

Given the strong demand, it’s a little surprising to see the company’s earnings and sales decelerating. In fact, in the most recent quarter, revenue slumped 6% to $5.4 billion. Earnings fell 25% to $0.58 per share. 

Investors aren’t too exuberant about the stock at the moment, but they haven’t thrown in the towel, either. The stock is up 3.2% since its report. The company said lower copper prices were the culprit behind the declines. 

At this juncture, with the stock trading below all key moving averages, there’s not enough momentum to put the probabilities of a near-term gain in your favor.
Should You Buy These Copper Stocks Ahead Of Monster Demand?

The situation is a little different for Canadian firm Teck Resources. It’s staged a 16% rally so far in August, on the heels of the company’s July earnings report. Revenue grew 126% to nearly $5.8 billion, while bottom-line growth came in at 416%, to $3.25 per share. 

Many miners are involved with multiple metals and commodities. That’s the case with Teck, which cited strong prices for steelmaking coal. A weaker Canadian dollar also helped. However, like many companies in many industries, Teck faced rising costs in areas including fuel, transportation, labor and other line item expenses.

The stock has been consolidating since June, and appears to be forming the right side of its current base. According to MarketBeat analyst data, Wall Street has a “moderate buy” rating on the stock.
Should You Buy These Copper Stocks Ahead Of Monster Demand?

Southern Copper is underperforming the broad market by a wide margin. It’s posted a year-to-date decline of 16.71%, but a fractional gain in the past month. 

The company posted earnings in late July. Revenue declined 20% to $2.3 billion. Earnings were up 3% to $1.25 per share. There’s been deceleration on both the top- and bottom lines in recent quarters.

Southern Copper’s current dividend yield is a healthy 8.26%, giving investors at least some relief while the stock languishes. 

So where does this leave investors if they want exposure to an industry that could benefit from higher demand in the coming years? Especially when there are a limited number of suppliers? 

At the moment, we’re not seeing the heightened demand for copper that’s predicted. This is one of those situations where industry sales may indeed ramp up dramatically, but we’re not seeing it yet. It’s tempting to nab a promising stock ahead of its big run-up, and it appears investors have plenty of time to make a play on copper before an epic rally. 
Should You Buy These Copper Stocks Ahead Of Monster Demand?

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Should you invest $1,000 in Freeport-McMoRan right now?

Before you consider Freeport-McMoRan, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Freeport-McMoRan wasn't on the list.

While Freeport-McMoRan currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Freeport-McMoRan (FCX)
4.6553 of 5 stars
$38.55-1.1%0.78%30.35Hold$44.95
Teck Resources (TECK)
2.7086 of 5 stars
$39.40-0.5%0.94%11.49Moderate Buy$42.50
Southern Copper (SCCO)
2.3746 of 5 stars
$81.75-0.3%3.91%26.04Strong Sell$66.75
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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