4 Commodity Stocks to Watch as the Global Economy Strengthens

Commodities are surging on a strong global economy, and stocks such as Hudbay Minerals Inc. (TSX:HBM)(NYSE:HBM) are surging in response.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Commodities have continued to perform well to begin 2018, building off the bull market that raged on in the previous year. The global economy has demonstrated the strongest growth since the 2007-2008 Financial Crisis. A weak U.S. dollar, which cheapens commodities in competing currencies, has also contributed to the bull market.

With that in mind, here are four stocks that will continue to see prices surge if the commodity bull does not abate.

North American Palladium Ltd. (TSX:PDL)

North American Palladium is a Toronto-based precious metals producer, with a LDI palladium mine near Thunder Bay, Ontario. Palladium exceeded $1,100 an ounce for the first time since early 2001. North American Palladium stock has already jumped 42.3% in 2018 as of close on January 10.

The company released its third-quarter results on November 3. Underground production increased 44% to 500,560 tonnes compared to 348,709 in the prior year. Adjusted EBITDA rose to $22 million from $10.1 million in Q3 2016. Net income climbed to $11 million over a $1.6 million loss in the previous year.

Hudbay Minerals Inc. (TSX:HBM)(NYSE:HBM)

Hudbay Minerals is a Toronto-based integrated mining company that produces copper and zinc. Zinc prices hit a 10-year high to kick off 2018, and copper will average $7,500 a tonne in the fourth quarter. Hudbay Minerals stock was up 4.96% at close on January 10.

Hudbay Minerals released its third-quarter results on November 1. It reported a 24% increase in operating cash flow to $154 million and a $40.9 million profit. The company posted consolidated copper production of 40,445 tonnes and consolidated zinc production of 36,635 tonnes — a 5% jump from the previous quarter. The stock also offered a modest dividend yield of 0.17%.

Altagas Ltd. (TSX:ALA)

Altagas is a Calgary-based diversified energy infrastructure company with three operating segments: gas, power, and utilities. Oil and gas prices have started 2018 strong on optimism from a continued OPEC production cut as well as turmoil in the Middle East. Altagas stock has risen 0.77% in 2018 as of close on January 10.

The company released its third-quarter results on October 19. Normalized net income was posted at $48 million or $0.28 per share compared to $38 million, or $0.23 per share in the previous year. The company also announced an attractive quarterly dividend of $0.18 per share, representing a 7.6% dividend yield.

First Quantum Minerals Ltd. (TSX:FM)

First Quantum is a Vancouver-based company specializing in exploration and development and produces copper, nickel, gold, zinc, and acid. The stock has increased 7.7% in 2018 as of close on January 10. The company released its third-quarter results on October 26.

It posted copper production of 145,376 tonnes and unit cost fell to $2.05 total per pound. The company reported a gross profit of $83 million compared to $80 million in the prior year. Sales revenues jumped to $877 million compared to $605 million in Q3 2016. Shares have climbed 28.5% year over year, and the company continues to be a great hold as copper, nickel, and even gold surge.

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 Ambrose O'Callaghan has no position in any stocks mentioned. Altagas is a recommendation of Stock Advisor Canada.

More on Investing

A solar cell panel generates power in a country mountain landscape.
Top TSX Stocks

3 TSX Stocks You Can Hold for the Next 3 Decades

While the market faces significant headwinds, it's crucial to ensure that you can commit to the TSX stocks you're holding…

Read more »

energy oil gas
Dividend Stocks

2 High-Yield Energy Stocks to Buy as Recession Approaches

Energy stocks such as TC Energy and Canadian Natural Resources allow investors to generate income even in recessionary times.

Read more »

green power renewable energy
Dividend Stocks

3 Top Dividend Stocks to Drive Your Passive Income

These three high-yielding, safe dividend stocks could boost your passive income.

Read more »

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

protect, safe, trust
Dividend Stocks

TFSA Wealth: How to Earn $363 in Monthly Passive Income for Life

Canadian investors can harness the power of the TFSA to generate steady tax-free passive income for decades.

Read more »

Canadian Dollars
Dividend Stocks

TFSA Millionaire: How to Turn $40,000 Into $1.2 Million for Retirement

Here's how TFSA investors are using the power of compounding to buy top Canadian dividend stocks to build retirement wealth.

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Superb Income and Growth Stocks for Every Portfolio

The market is full of superb income and growth stocks, but not all belong in your portfolio. Here are three…

Read more »

stock market
Stocks for Beginners

Worried About Stagflation? 2 Canadian Stocks for All Market Cycles 

Stagflation delays economic recovery. You can keep your portfolio stagflation ready with these Canadian stocks that are suitable for all…

Read more »