The mining industry involves different exploration, extraction and processing of valuable minerals and materials. Mining stocks can be a great investment. Minerals are divided into two main categories: metallic and nonmetallic, including:
- Precious metals (silver, gold, palladium, diamond and platinum)
- Industrial metals (copper, aluminum, iron ore, nickel, cobalt, zinc and lithium)
- Construction materials (sand, limestone and crushed stones)
- Fertilizers (phosphate, potash and boron)
- Energy materials (uranium, coal and bitumen)
Many minerals play an essential role in running the global economy. During periods of expansion, minerals are in high demand. Economic recessions may plunge mining stocks into the stocks under $5 category.
As an investor, you need to carefully observe and analyze the global market before you invest in these stocks. Some minerals have a higher value and higher demand compared to others. These are premarket movers in the mining industry. These stocks offer a viable long-term investment option as long as you pick the right mining stocks.
Here’s a list of the best mining stocks you may want to add to your portfolio.
Quick Look at the Best Mining Stocks:
- B2Gold Corp
- Sibanye Stillwater Ltd
- Barrick Gold
- Freeport-McMoRan Inc
- Alexco Resource Corp
Overview
The demand for safe-haven investment options is rising and the mining industry offers tax revenue for global governments. A reliable investment vehicle for most investors are mining stocks. These stocks are made of specialty metals and non-metals are always in demand.
Over the years, investors have been able to gain a lot of exposure to the wide variety of precious metals. Investors have invested in these stocks of companies that deal in mining and exploration of precious metals. Some of the companies in the mining industry have outperformed many companies despite the COVID-19 economic fallout.
Gold can be found above the under $10 category. Gold has outperformed many commodities in the economy and investors are investing more in gold.
Best Online Brokers for Mining Stock
Here’s a list of online brokers to guide and help you invest in the best mining stocks.
Features to Look for in Mining Stock
The mining industry is capital intensive and highly cyclical. The industry is profoundly affected by the economy and mines are costly to construct — the mining industry has suffered in the past due to its need for lots of capital when building mines and ended with meager profits.
As a result, a majority of mining stocks have ended up underperforming in the market, with stocks under $20. To find the best mining stocks, you need to look at the following features:
- Low production cost: A mining company with low production costs will remain profitable even during weak periods. Mining companies can reduce production costs by using the latest mining technologies, which also improves the efficiency of the mining process.
- Strong balance sheet: A company’s balance sheet should include an investment-grade bond rating, borrowing capacity, manageable debt and lots of capital. Financial flexibility means a company can survive an economic storm and still offer its shareholders competitive earnings per share.
Mining Stocks for Your Portfolio
Mining is indeed a tough business. As an investor, you need to focus on miners, which can remain productive even during tough economic times. A strong balance sheet and low production costs are critical. These 2 factors play an essential role in guaranteeing investors returns for their capital through buybacks and dividends. Investors are also positioned to increase the value of their shares during successful economic times.
Frequently Asked Questions
What are mining stocks?
Mining stocks are shares in companies that mine for mateirals and minerals.
Are mining stocks a good investment?
Mining stocks are a good investment because the materials and minerals that are mined are important for many sectors.
What are the best mining stocks?
Benzinga lists the best mining stocks on the list above.
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