Copper’s Role in the Clean Energy Boom: Stocks to Watch

Copper has been a hot commodity driving the transition to a cleaner, greener future. Its unique properties, such as high conductivity and durability, make it a vital material for everything from renewable energy projects and drinking water infrastructure to cutting-edge electronics and data centers. From wind turbines that harness the power of nature to electric vehicles (EVs) that are revolutionizing transportation, copper is at the heart of it all.

The importance of the red metal is so prominent that it is often called “Doctor Copper” and is closely linked to industrial production and is a barometer of economic health. At the time of writing, copper The spot price is $3.95 per pound.It rose from $3.86 per pound earlier this year. Analysts expect the price to rise further, reaching between $4.30 and $4.80 per pound by the end of 2025.

According to S&P GlobalThe global push toward electrification and clean energy is expected to double U.S. copper demand by 2035. This “electrification metal” is essential to achieving net-zero carbon emissions by 2050 and is needed for everything from wind and solar power to electric vehicles and data centers. And Additional 1.5 million metric tons By 2035, 3 million tonnes of copper will be needed for the energy transition alone, pushing total U.S. consumption to 3.5 million tonnes, a 112% increase from 2023.

Worldwide copper mine production is approximately 22 million tons in 2023That’s up from 16 million tonnes in 2010. Forecasts suggest production could reach 30 million tonnes by 2036, but that increase may fall short of the anticipated surge in demand.

Nonetheless, thanks to recycling efforts, more copper is available today than ever before. 30% of the world’s copper Over the past decade, demand has been met through recycled copper. Future policies and technologies will continue to improve resource efficiency in mining and recycling, ensuring copper’s role in sustainable development.

Additionally, the global copper market is expected to reach approximately $548.2 billion by 2034. Average annual growth rate: 5.1% From 2024 to 2034.

Therefore, we believe there is no smarter move than investing in copper to keep up with this growing demand. Here are three copper stocks to add to your watchlist: Southern Company Corporation (SCCO), Freeport-McMoRan Corporation (FCX)and Tech Resources Limited (TECK).

Southern Company Corporation (SCCO)

Southern Company Corporation (SCCO) A leading mining giant headquartered in Phoenix, Southern Copper is known for having the world’s largest copper reserves. While copper is its core business, Southern Copper also extracts valuable byproducts such as silver, zinc, and molybdenum.

This diversification, while important, does not obscure the country’s major reliance on copper, which accounts for about c. In the second quarter of 2024, the company reported that copper production increased by 6.6% to 242,474 tonnes during the same quarter. SCCO plans to produce 963,000 tonnes of copper in 2024, a 6% increase from the previous year.

at 2nd quarter (Ended June 30, 2024) The Company’s net sales increased 35.5% year over year to $3.12 billion. Net income attributable to SCCO was $950.2 million, or $1.22 per share, up 73.6% and 71.8% year over year, respectively.

Street expects SCCO’s revenue and EPS for the year ending December 31, 2024 to be $11.8 billion and $4.57 billion, respectively, up 19.3% and 47.2% year over year. SCCO’s stock has gained more than 37% over the past nine months and nearly 14% since the beginning of the year.

The recent rise in copper prices has not only strengthened the company’s market performance but also enabled it to reward shareholders. Last month, the company Dividend of $0.60 per sharePayable on August 26, 2024. Based on the current share price, the stock offers an attractive dividend yield of 2.4%, appealing to income-minded investors.

Freeport-McMoRan Corporation (FCX)

Next is Freeport-McMoRan Corporation (FCX)A leading international mining company with a diversified portfolio of assets and the world’s largest copper, gold and molybdenum reserves. Headquartered in Phoenix, Arizona, Freeport-McMoRan operates major sites such as the Grasberg mineral district in Indonesia and mining operations in North and South America, including Morenci and Cerro Verde.

Last month at the company Achieved Grasberg has achieved a significant milestone in expanding its operations by bringing a new copper smelter online with its Indonesian subsidiary PT Freeport Indonesia. FCX is expected to be up and running at full capacity by the end of the year.

FCX’s net revenue for the second quarter (ending June 30, 2024) was 15.5% growth It increased to $6.62 billion from a year ago. The company’s net income was $616 million, or $0.42 per share, up 79.6% and 82.6% year-over-year, respectively.

The company produced 931 million pounds of copper in the second quarter and expects to produce a total of about 4.1 billion pounds of copper in 2024, of which 1 billion pounds are expected to be produced in the third quarter.

The company has strong cash flow Paid Pays a dividend of $0.15 per share to shareholders on August 1, 2024. With a payout ratio of 41.7% and a projected dividend yield of 1.52%, Freeport offers investors an attractive combination of income and growth potential. FCX’s four-year average yield is 1.05%, and its dividend payments have grown at a CAGR of 25.9% over the past three years.

With copper prices strong and demand prospects robust, analysts are forecasting revenue growth of 14.6% and earnings per share growth of 9.6% for the fiscal year ending December 31, 2024. FCX’s stock has surged more than 16% over the past nine months, reflecting its strong market position.

Tech Resources Limited (TECK)

Tech Resources Limited (TECK) is Canada’s leading resource company, supplying essential metals for global development and energy transition. With its world-class copper and zinc operations and industry-leading copper growth portfolio, the company is committed to responsible growth, delivering value, and ensuring long-term business resilience.

Early July, TECK Sold Out Transfers remaining 77% stake in steelmaking coal business to Glencore plc. This strategic move positions Teck Resources as a pure energy transition metals company with a focus on copper.

TECK’s revenue is 2nd quarter Copper production for the quarter ended June 30, 2024 was C$3.87 billion (USD2.82 billion), up 10.1% year-over-year. The company achieved a record quarterly copper production of 110,400 tonnes, with 51,300 tonnes produced at Quebrada Blanca (QB).

Adjusted EBITDA increased 12.9% from a year ago to C$1.67 billion (US$1.21 billion), driven by robust copper production and strong prices. Adjusted earnings from continuing operations attributable to shareholders were C$413 million (US$302.2 million), or US$0.79 per share.

For the current year ending December 31, 2024, TECK’s revenue and EPS are expected to reach $9.98 billion and $1.89 billion, respectively. The stock has gained 23.2% over the past nine months.

With proceeds from the sale of the coal business, TECK’s board of directors has approved a stock purchase of up to $2.75 billion. dividend Includes a $0.625 per share dividend, plus an additional $0.50 dividend payable on September 27, 2024. Combined with the $500 million share repurchase announced in February, the sale brings total shareholder value to $3.5 billion.

Teck offers an attractive proposition to income-oriented investors with a four-year average dividend yield of 1.34%. Additionally, dividend payments have grown at a CAGR of 32.6% over the past three years and 19.6% over the past five years, making it an attractive choice for those seeking exposure to the copper sector.

conclusion

As the world pursues a greener future, copper’s pivotal role in renewable energy, EVs, and advanced electronics makes it a must-watch commodity. Companies like SCCO, FCX, and TECK are well-positioned to benefit from this surging copper demand. These dividend-paying stocks are poised to provide steady income and lead a sustainable future, making them a worthy addition to your portfolio.