3 FTSE 100 mining stocks worth considering: Evraz, Rio Tinto, BHP

August 13, 2021 01:25 PM BST | By Suhita Poddar
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  • Improved sectoral outlook for the mining sector and rising commodity prices have boosted UK’s mining stocks in FY 2021
  • Evraz, Rio Tinto both recently announced strong H1 2021 results, outperforming the broader markets
  • BHP is set to announce its results next week.

Investment bank JP Morgan recently made an upward change to its outlook for the mining sector, upgrading mining stocks to overweight from neutral due to a greater percentage of mining companies’ free cash flow being funnelled into dividends to shareholders.

Mining companies performed better due to a strategy shift towards boosting their balance sheet, maintaining a low operating leverage and other factors.

Commodity prices have risen recently, thereby benefitting metals and mining stocks, which were battered in 2020 due to pandemic induced weakened demand.

Copper future prices were trading at USD 9,492.00, up by 0.26 per cent on 13 August at 11:11 AM. While Aluminium futures were trading at USD 2,594.50, up by 0.79 per cent.

Let us take a closer look at 3 FTSE 100 index listed stocks in the industrial metals and mining sector:

  1. Evraz Plc (LON: EVR)

Evraz is a UK based multinational steel manufacturer. The company recently announced it had approved to build a new vanadium plant located in Uzlovaya special economic zone, in Russia's Tula region.

The group’s consolidated EBITDA rose by 94 per cent to US$ 2,082 million in H1 2021 due to higher steel, vanadium and coal product sales prices, efficient capital deployment and other factors.

(Image Source: Refinitiv)

Evraz’s shares were trading at GBX 600.40, up by 0.40 per cent as of 13 August at 08:40 AM GMT+1. Meanwhile, the FTSE 100 index was trading at 7,219.10, up by 0.36 per cent.

The company’s market cap stands at £8,722.96 million and its one-year return is at 69.14 per cent as of 13 August.

Related Article: Evraz, Vast Resources, Greatland Gold, and Red Rock Resource - 4 Metals and Mining Stocks in Focus

  1. Rio Tinto Plc (LON: RIO)

Rio Tinto is the second largest metals and mining player globally. The company reported record results in H1 2021, posting underlying earnings rise of 156 per cent to US$ 12.2 million. It also announced interim dividends of 561 cents per share, which accounts for 5 per cent of its underlying earnings.

The record results were due to rising commodity prices and also boosted by the covid-19 induced government stimulus, which helped drive demand.

(Image Source: Refinitiv)

Rio’s shares were trading at GBX 5,639.00, up by 0.04 per cent as of 13 August at 09:54 AM GMT+1. Meanwhile, the industrial metals and mining sectoral index was trading at 6,704.64, up by 0.10 per cent.

The company’s market cap stands at £70,342.82 million and its one-year return is at 16.53 per cent as of 13 August.

Related Article: Glencore (LON: GLEN) and Rio Tinto (LON: RIO) – Are they worth holding on to?

  1. BHP Group Plc (LON: BHP)

BHP Group is a global resources company. The company announced the signing of its first agreement under revised terms with traditional landowners, the Barada Barna Aboriginal Corporation (BBAC), for the South Walker Creek Mine in Queensland, Australia today.

The group is expected to make its FY 2021 final dividend and preliminary FY 2021 announcement on 17 August. It recently announced its ex-dividend date of 1 September, and payment date of 21 September for FY 2021 dividend.

(Image Source: Refinitiv)

BHP’s shares were trading at GBX 2,307.00, up by 0.81 per cent as of 13 August at 10:13 AM GMT+1. The company’s market cap stands at £48,334.76 million and its one-year return is at 24.95 per cent as of 13 August.

Bottom Line

Commodity stocks are in demand during times of economic uncertainty due to the sector being a crucial part of an economy. Overall, these 3 major metals and mining companies on the LSE have benefitted in FY 2021 due to firming commodity prices and improved demand. However, these are recommendation or solicitation to buy, one must conduct their own research prior to investing in a stock.


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