5 Canadian iron stocks to consider with election done and dusted

Highlights

  • One of the iron ore companies mentioned has an MoU with the Ukraine government regarding one of its iron ore projects based in Ukraine.
  • Among the below, the highest ROE posted was 987.64 per cent.
  • For one of these companies, royalty revenue grew 68 per cent YoY in its latest quarter.

The Mining Association of Canada congratulated Mr. Justin Trudeau on getting elected for a third consecutive term as prime minister.

Before the election results, uncertainty sprouted among the investors and mining companies giving way to sentiment swings of the prices of iron stocks. The liberals had an election manifesto that promoted low carbon-intensive mines, low emission technologies, and a clean and green ecosystem.

The S&P/TSX Capped Material index was down by 5.38 per cent on a Year-to-Date (YTD), and dipped by 4.13 per cent on a Month-to-Date (MTD) basis.

Some analysts believe that strong macroeconomic policies formulated by the new government can write a growth story for the future.

On that note, let us explore some Canadian iron stocks.

  1. Labrador Iron Ore Royalty Corporation (TSX: LIF)

The dividend-paying Canadian corporation earns commission and royalty income from investments made in Candian iron ore companies. Labrador Iron Ore also produces iron ore pellets for customers across the globe.

The shareholders of Labrador Iron Ore are expecting a quarterly dividend of C$ 2.1 per share to be paid on October 26. The average three-year dividend growth rate was 39.51 per cent, and the dividend yield was 22.02 per cent on September 22.

In the second quarter of the fiscal year 2021, Labrador Iron Ore Royalty posted total revenue of C$ 79.2 million, up from C$ 46.7 million in Q2 FY20. During Q2 FY21, the company sold 4.1 million tonnes of iron ore.

The iron ore corporation held earnings per share (EPS) of 5.13, return on equity (ROE) of 57.11 and return on assets (ROA) of 40.56 per cent on September 22.

The stocks of Labrador Iron Ore closed at C$ 38.14 on September 22 and posted a one-year return of 44 per cent.

The S&P/TSX Capped Material Index dropped by 4.13 per cent on a month-to-date basis

 

  1. Champion Iron Limited (TSX: CIA)

The iron ore properties of the exploration company are based in Quebec, Canada. The company explores and develops iron ore. Champion Iron held a market cap of C$ 2.24 billion and outstanding shares were 506.42 million on September 22.

On September 21, the stock price of Champion Iron traded close to 81 per cent above its 52-week low of C$ 2.45 (September 24, 2020) and closed at C$ 4.43 apiece on this day. Over the past year, the company's stock price expanded by 52 percent but was down by three per cent in the last nine months.

Champion Iron posted revenue of C$ 545.4 million and a record EBITDA of C$ 405.7 million in Q1 FY22. During the quarter, the company acquired the Kamistiatusset iron project and commenced the project's feasibility study.

The company held a price-to-earning (P/E) ratio of 4.4, ROE of 82.37, and ROA of 46.25 per cent on September 22.

Also Read: 3 best base metals stocks to buy in 2021 

  1. Black Iron Inc. (TSX: BKI)

The company develops and explores ferrous metals from an iron ore project located in Ukraine. Black Iron is a C$ 77.05 million market cap (September 22) Canada-based iron ore company.

As per the latest report, the management of Black Iron stated that the Ukraine government had reached a memorandum of understanding on the investment support on its Shymanivske Iron Ore Project.

The metal and mining scrip's debt-to-equity (D/E) ratio was 0.12 and it held an ROE of 987.64 per cent on September 22.

The stocks of Black Iron reached their 52-week high of C$ 0.76 on May 10 and were priced at C$ 0.25 on September 21 at market close. The stocks dipped by nearly 25 per cent on a YTD basis but expanded by 96 per cent over the past year.

Also Read: Labrador Iron (TSX: LIF): A High-Dividend Yielding Midcap Metal Stock

  1. Altius Minerals Corporation (TSX: ALS)

The dividend-paying mining company produces metals like iron, zinc, copper, silver, etc. On September 15, Altius Minerals issued a quarterly dividend of C$ 0.07 per share to its shareholders. The dividends grew at a five-year average of 12.56 per cent, and the dividend yield was 1.81 per cent on September 22.

Altius Minerals in Q2 FY2021 posted royalty revenue of C$ 21.9 million, an increase of 68 per cent Year-over-Year (YoY). Its net operating cash flow was C$ 5.8 million in Q2 FY21. The iron ore revenue was C$ 5 million, accounting for 23 percent of the total royalty revenue in the same quarter.

The metal and mining company held a market cap of C$ 640.41 million and a price-to-book (P/B) ratio of 1.61 (at the time of writing)

At the market close on September 21, the stock price of Altius Minerals was C$ 15.43, and the one-year stock return was 49 per cent.

  1. Oceanic Iron Ore Corp. (TSXV: FEO)

Oceanic Iron is a Canadian iron exploration company that acquires iron ore properties located in Quebec. The company launched its initial public offering (IPO) on June 13, 1988, and got listed on the Toronto Stock Exchange Venture.

The iron ore company held a P/B ratio of 0.33 and a market cap of C$ 12.21 million (at the time of writing).

On a quarter-to-date (QTD) basis, the stock price of Oceanic Iron Ore dipped by close to 32 per cent and was down by nearly 46 per cent over the past year. The stock price closed at C$ 0.13 on September 21.

Bottom line

The uncertainty around the Canadian election led to some price volatility but the incumbent government may give a ray of hope to investors and mining companies, however, that remains to be seen.

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