5 Canadian copper stocks to buy as electric vehicles demand surges

Highlights

• One of the companies mentioned here produces 90 million pounds of copper on average each year.
• One of the companies below has a copper discovery considered to be the world’s only low-risk one.
• Among them, the highest one-year stock return was close to 186 per cent.

Copper is a metal that is soft and malleable, and its use is widespread. As it is known, copper is used in electric cables and wires. Based on its precision and high conductivity, copper is also used in construction materials, industrial purposes, and for fulfilling plumbing needs.

In recent times, with the emergence and need to uphold climate change requirements, industrialists have found a way to use copper in clean and emerging technologies. Copper is lately being used as a material in the manufacturing of electric vehicles and solar cells. 

With the growing need and demand for electric vehicles and zero-emission vehicles, many analysts expect copper production to increase multi-fold. In Canadian regions like British Columbia, Ontario, Quebec, etc., a lot of copper mines are located, and copper is produced.

The S&P/TSX Venture Metals & Mining (Industry) Index dipped by 3.08 per cent on a Year-to-Date basis. However, the index posted an intraday return of 1.92 per cent on September 23. Moreover, the S&P/TSX Capped Material Index posted an intraday return of 0.5 per cent on September 23.

On that note, let us look at some of the Canadian copper stocks amidst soaring prices.

1. Copper Mountain Mining Corporation (TSX:CMMC)

The company explores, develops, and produces copper, and its flagship copper mine is located in southern British Columbia. Copper Mountain Mining produces 90 million pounds of copper on an average each year.

The senior leadership of Copper Mountain Mining, in its latest report, stated that the company commenced operation of the third ball mill at the copper mine located in British Columbia.

In the second quarter of the fiscal year 2021, Copper Mountain Mining produced 29.6 million pounds of copper. Its revenue was C$ 142.1 million in the same quarter.

The stock price of the copper-producing company soared by 186 per cent over the past year and closed at C$ 3.06 apiece on September 22. It also traded nearly 248 per cent above its 52-week low price of C$ 0.88 on this day.

Copper Mountain Mining held a price-to-earning (P/E) ratio of 5.4, return on equity (ROE) of 40.27 per cent and return on assets (ROA) of 12.77 per cent on September 23.

2. Ero Copper Corp. (TSX: ERO)

The base metal company is engaged in producing and selling copper from one of its properties in Brazil and selling by-products made from gold and silver. Ero Copper held outstanding shares of 88.4 million and a market cap of C$ 2 billion on September 23.

The stock price of Ero Copper closed at C$ 22.65 on September 22, which was 24 per cent below its 52-week high of C$ 29.76 (May 18). The one-year stock return was close to 22 per cent.

The company produced 10,898 tonnes of copper in Q2 FY21. Its adjusted EBITDA was US$ 85.5 million, and cash flow from operations was US$ 85.1 million in the same period.

The metal and mining company held an ROE of 93.19 per cent, ROA was 39.55 per cent, and earnings per share (EPS) was 3.09 on September 23.

Also read: Marimaca & Ero: 2 TSX Stocks To Watch As Copper Price Soars

3. Three Valley Copper Corp (TSXV: TVC)

The metal and mining company focuses on producing copper from its property located in Chile. The management of Three Valley Copper Corp announced the commencement of a mine drilling program in its Chile-based property, as per the latest report.

On the valuation front, the price-to-book (P/B) of the company was 0.65, and the debt-to-equity (D/E) ratio was 2.51 on September 23. The metal and mining scrip also held a market cap of C$ 23.42 million on this day.

At the market close on September 22, the stock price of Three Valley Copper was C$ 0.42 and traded 200 per cent above its 52-week low of C$ 0.14 on this day. It reached its 52-week high of C$ 1.02 (April 29). Over the past year, the stock price expanded by 53 per cent.

Three Valley Copper posted revenue of US$ 7.5 million, and adjusted EBITDA was US$ 0.13 million in Q2 FY21.

The company sold 1,010 tonnes of copper cathodes during the same quarter.

Also Read: Investors Are Eyeing This Stock Amid Rallying Copper Prices!

4. Marimaca Copper Corp (TSX:MARI)

The C$ 335.01 million market cap is a company engaged in exploring copper from its Marimaca Copper Project. The project is perceived to be a low-risk one. As per the latest report, the company discovered new shallow oxide copper at the Mercedes Target.

The metal and mining scrip held a P/B ratio of 2.93 and a D/E ratio of 0.07 (at the time of writing).

Over the past year, the stock price climbed up by 22 per cent. However, on a quarter-to-date (QTD) it dipped by five per cent.

It reached its 52-week high of C$ 5.85 on April 23. The stock price was C$ 3.81 at the end of the market close on September 22.

5. Golden Valley Mines and Royalties Ltd (TSXV:GZZ)

The company evaluates and explores royalty projects and assets based in Canada. Golden Valley Mines and Royalties debuted on the Toronto Stock Exchange Venture after the successful launch of its initial public offering (IPO) on December 20, 2001.

Golden Valley Mines and Royalties held a market cap of C$ 176.32 million and a P/B ratio of 6.78. The outstanding shares of the company were 13.74 million (at the time of writing).

The stock price of the metal and mining company traded 1.5 per cent above its 52-week high of C$ 12.64 and roughly 113 per cent above its 52-week low of C$ 6.01 on September 22, and on this day, it closed at C$ 12.83 apiece.

On a QTD basis, the stock price rocketed by 101 per cent, and over the past year, it expanded by 60 per cent.

Bottom line

Copper is a rare metal that does not degrade and loses its chemical composition even after recycling. With the increasing demand for electric vehicles and the need for copper to be used to produce batteries and cells, many analysts believe that copper stocks have a lot to deliver in the future.