3 ASX large-cap mining stocks with high returns in February 2021

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Summary

  • First, it was iron ore, then came copper, and now, it is nickel’s turn to turn up the heat in the commodity market.
  • The resources industry is experiencing a commodity “Supercycle” phase, driving the base metals’ prices to their respective highs.
  • With the rising commodity prices, resources companies are performing considerably, generating handsome returns for their shareholders.

China’s demand for steel provided a breather for Australia’s struggling mining industry when the world was busy fighting the deadly coronavirus. Iron ore prices surged to a 9-year high during December 2020, while copper prices have been on fire for 7-8 months. Also, On 25 February 2021, the yellow metal breached its 9-year high, reaching US$9614.5 per tonne on the London Metal Exchange (LME).

Experts and analyst have shared their theory for the soaring commodity prices and believe that the commodity “supercycle” is behind the base metals’ raging prices.

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READ MORE: Nickel soaring at six-year highs on demand surge

Commodity Supercycle, in simple terms, is the price movement of metals above the trending price. Such trends appeared multiple times when the demand for metals was bolstered by the increased thrust on infrastructure and related projects by major countries.

Investors in the commodity market made fortunes in the last year when the equity market was sluggish and struggling. Gold, silver, iron ore, copper, nickel, and several others provided investors with ample opportunities to earn high returns.

Since November 2020, the major equity indices have moved more than 20%. Once again, the equity market has become attractive, and individuals invested in the resources industry are getting handsome returns.

Let us flick through three large-cap metal & mining players based on the returns they generated in the last month.

BHP Group (ASX:BHP)

The mining behemoth, BHP, has a diversified mineral portfolio, including iron ore, copper, petroleum, etc.  The Group has posted a robust half-yearly report for the period ending on 31 December 2020. The underlying EBIDTA was US$14.7 billion, 21% higher than the previous half-year. The Group managed an underlying attributable profit of US$6 billion while attributable profit clocked at US$3.9 billion for the six months.

BHP announced a dividend of US$0.101 per share amidst the strong performance by the Group.

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More on Report: BHP Group (ASX:BHP) Puts Up A Strong Show With Robust H1 Results

Stock Information: On 01 March 2021, Group’s shares closed at A$50.090 with a gain of 1.953%. The shares have provided a handsome return of ~11.5% in the last month. The Company’s market cap stood at A$148.61 billion.

Rio Tinto Limited (ASX:RIO)

The diversified energy and minerals giant is one of the largest producers of iron ore and aluminium. The Company generated revenue of A$27.5 billion during 2020 alone form the sales of iron ore only. Rio’s net cash from operating activities for 2020 was A$15.9 billion. The strong cash flow is evident of the premium assets in the Company’s portfolio.

Rio Tinto announced a dividend of A$0.557 per share for the year 2020.

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ALSO READ: RIO Tinto (ASX:RIO) ups its Ante with Record Production in 2020

Stock Information: Rio closed the day’s trade at A$127.700 with a marginal gain of 0.4%. The Company’s shares have returned nearly 14.4% to its shareholders in the last month. As of 1 March 2021, the market cap of the Company is A$47.84 billion.

South32 Limited (ASX:S32)

The globally diversified mineral to energy company South 32 has its operation in Australia, South America, and Africa. The Company’s primary focus is on aluminium, silver, lead, zinc, metallurgical coal, manganese, and nickel.

South 32 reported revenue of US$2.943 billion for the half-year period ended on 31 December 2020. The profit after tax (PAT) for the reporting period was US$53 million. The Company announced a dividend of US1.4 cents per share for the six months.

The Company began the year 2021 on a high note. S32’s net cash grew to US$452 million on 31 January 2021 from US$275 million at the end of December 2020. This shows a rebound in demand from the global market in 2021.

Stock Information: During the last month, South 32 shares performed well on the bourse and gave a monthly return of nearly 5.7%. On 1 March 2021, the Company closed the day’s trade at A$2.790, up 0.722%. The Company has a market cap of A$13.67 billion.


 


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