Mine for Dividends With These 2 Companies

The worldwide industrial metals and minerals industry is huge — here’s what you need to know to take advantage of it.

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The Motley Fool

The industrial metals and minerals industry involves everything from the extraction of resources to the manufacturing and processing of end products. This industry is one of the largest industrial sectors globally. Here are two dividend-paying companies to consider in this basic materials sector.

1. Cameco

Cameco (TSX: CCO)(NYSE: CCJ) is a producer and seller of uranium. Although it’s dependent on the unpredictable nuclear industry, the company did realize record production, revenue, and annual average realized uranium prices in 2013. Cameco accounted for approximately 15% of global uranium production in 2013. For 2014, Cameco expects sales revenue in its uranium segment to grow 5%-10% because of the strengthening U.S. dollar.

Important for Cameco is the start of production at the Cigar Lake mine. The mine commenced production on March 13, 2014. Cigar Lake is the world’s second largest high-grade uranium deposit, and has grades 100 times the world average. Cameco is the mine operator and owns 50%. Its share of the deposit’s proven and probable reserves is 108.4 million pounds of triuranium octoxide at an average grade of 18.3%.

In April, Cameco declared a dividend of $0.10 per share payable on July 15, 2014. Cameco’s current dividend yield is 1.9% and its five-year average dividend yield is 1.6%. Since its 1991 IPO, the company has never missed a dividend payment.

2. Teck Resources

Teck Resources (TSX: TCK.B)(NYSE: TCK) focuses on copper, steelmaking coal, zinc, and energy. It owns or has an interest in 13 mines in Canada, the U.S., Chile, and Peru. It also has one large metallurgical complex and a wind power facility in Canada.

Teck Resources has committed to spending an estimated $2.94 billion over the next four years on Fort Hills oil sands project development. The Fort Hills oil sands project is in northern Alberta. Teck holds a 20% interest in the Fort Hills Energy Limited Partnership, which owns the project. Fort Hills is considered one of the best remaining undeveloped oil sand mining leases. It has an estimated contingent resource of 3.3 billion barrels of bitumen. Teck Resources’ share of production is 36,000 bpd, or 13 million barrels per year, of bitumen.

In April, Teck Resources announced a dividend of $0.4078 per share. Its current dividend yield is 3.8%, its five-year average dividend yield is 2.4%, and its annualized dividend rate is $0.90.

The worldwide industrial metals and minerals industry is expected to be worth close to $5.58 trillion by the end of 2015. Consider gaining a piece of the industry by way of these dividend-paying companies with solid plans for growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no positions in any of the companies mentioned in this article. 

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