- New developments in clean and renewable technologies could stimulate the demand for base metal companies, which could positively influence their stock performance.
- The TSX’s base metals index surged by about 40 per cent in the last one year.
- A mining stock mentioned here rocketed by approximately 223 per cent in the last 12 months.
Some investors consider base metals a healthier investment deal than precious metals as these are widely used in commercial and industrial businesses. Hence, base metals could be a significant player in limiting the carbon footprints across various sectors and industries.
Rising concerns over climate change have motivated the economies to focus on the clean energy and renewable sources, which may spur the demand for base metals.
The TSX’s base metals index surged by about 40 per cent in the last one year. Now, let’s look at three TSX-listed base metals stocks.
Also read: 3 TSX-listed steel stocks to buy in Q4 2021
1. First Quantum Minerals Ltd (TSX: FM)
Toronto-based miner First Quantum Minerals Ltd is mainly known for copper production. It also mines nickel, zinc, pyrite and other metals.
In the third quarter of fiscal 2021, First Quantum levelled up its total copper production by five per cent quarter-over-quarter (QoQ) to 209,859 tonnes. This was primarily due to record production at Cobre Panam site and robust performance at Sentinel.
Port congestion and limited container shipping capacity around the globe hampered its sales volume in Zambia, due to which its gross profit was US$ 613 million in Q3 FY2021, down from US$ 625 million in Q2 FY2021. In addition, it reduced its net debt by US$ 449 million in the latest quarter.
FM stock, on the other hand, soared by about 22 per cent on a quarter-to-date (QTD) basis. Its stock zoomed by almost 63 per cent in the past 12 months.
The mining stock closed at C$ 28.62 apiece on Tuesday, November 23, up by almost six per cent.
First Quantum held a market capitalization of C$ 19.7 billion and a price-to-earnings ratio of 24.60 (as of Wednesday, November 24).
2. Teck Resources Limited (TSX: TECK.B)
Teck Resources Limited is a Vancouver, British Columbia headquartered diversified mining company involved in the coal, copper, zinc and oil sands production. Currently, due to heavy storms, floods and mudslides in British Columbia, the company is suffering some logistical challenges.
Teck reported adjusted EBITDA of C$ 2.1 billion in the third quarter of fiscal 2021, as compared to C$ 638 million in Q3 FY2020. Its profit attributable to shareholders was C$ 816 million, a notable increase from C$ 61 million a year ago.
Teck stock, which closed at C$ 34.59 apiece on November 23, spiked by 30 per cent in the last 90 days. The scrip also jumped by about 72 per cent in the past year.
Teck is expected to dole out a quarterly dividend of C$ 0.05 apiece, scheduled for December 31.
3. Capstone Mining Corp (TSX:CS)
Capstone Mining Corp is a copper-focused miner that particularly operates mineral assets in the Americas.
Capstone recorded net income of US$ 35 million and adjusted EBITDA of US$ 72.3 million in the third quarter of FY2021. It had a total liquidity of US$ 433.2 million with no long-term debt in this quarter.
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Capstone’s stock swelled by about 147 per cent so far in 2021. Also, its stock rocketed by approximately 223 per cent in the last 12 months.
After hitting a day high of C$ 6.20, CS stock closed at C$ 5.88 apiece on November 23, up by roughly one per cent.
Capstone held a return on equity of 24.92 per cent.
Also read: 2 top TSX copper stocks to buy
Investment in base metals could benefit investors in long term as base metals are widely used in various existing and emerging markets, including electric vehicles and batteries. Also, new developments in clean and renewable technologies may stimulate the demand for base metals, which could positively influence their stock performance.