These Are My Top 3 Discounted Mining Stocks to Buy Right Now

Trevali Mining Corp. (TSX:TV) and two other stocks are trading at deep discounts at the moment. See which has the best growth outlook and which pays dividends.

| More on:
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

Cheap mining stocks are an investor’s paradise at the moment, with some great quality Canadian assets changing hands at heavily discounted prices. I’ve gone through some of the best value stocks out there in terms of quality to bring you this triple-whammy of metal and mineral picks. There are some dividends on offer, some growth, and also some good diversification. Let’s see which of the three stocks is our top discounted mining pick for today.

Trevali Mining (TSX:TV)

With a base of operations that straddles Peru and Canada, Trevali Mining is one of the best natural resource stocks on the TSX, and today it’s trading at a great price. Discounted by 32% of its future cash flow value, you have a set of great multiples underlining value, with highlights being a P/E of 6.6 times earnings and P/B of 0.6 times book.

There’s not much room left to grow in this stock, though, with an 8.1% expected contraction in earnings over the next one to three years. However, a return on equity of 9% last year and low debt level of 18.5% of net worth make this a quality choice at the moment if you are looking for a bargain mining stock.

Lundin Mining (TSX:LUN)

This is a great stock to buy if you want ready diversification in your mining portfolio. Spread across Chile, the U.S., Portugal, and Sweden, Lundin Mining is trading at a discount of 35% compared to its future cash flow value. A P/E of 8.4 times earnings and PEG of 0.4 times growth look great, and Lundin Mining is also trading at book value today, underlining that valuation.

If any growth investors are combing through this list, be aware of a 21.7% expected annual growth in earnings over the next one to three years. It’s a high-quality stock, too, with a return on equity of 12% last year, low debt of 10.6% of net worth, and even a dividend, currently paying a yield of 1.88%.

Capstone Mining (TSX:CS)

With a very North American vibe, Capstone Mining is your quintessential base metal explorer and producer for Canada, Mexico, and the U.S. It’s discounted by over 50% of its future cash flow value, which is great news for value investors. Multiples-focused investors should check out its P/E of three times earnings, PEG of 0.1 times growth, and P/B of 0.3 times book.

A 26.1% expected annual growth in earnings over the next one to three years marks this one out as a solid pick for growth investors, while in terms of quality, it’s got debt of 30.5% of net worth and a return on equity of 8% last year; however, it pays no dividend.

At first glance, a definite downward trend in Capstone Mining’s share price may make it a contender for momentum traders; however, the trend appears to be ongoing, so check out the share price data for a clearer indication.

The bottom line

Lundin Mining is looking like the best of the bunch today, with great value underpinned with instant diversification and solid quality. Trevali Mining is probably the weakest of the three, with that negative outlook in terms of earnings, while Capstone Mining has some growth ahead.

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 Victoria Hetherington has no position in any of the stocks mentioned.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy Now and Own for 25 Years

These top TSX dividend stocks look oversold and now offer attractive yields for TFSA and RRSP investors.

Read more »

Profit dial turned up to maximum
Dividend Stocks

RRSP Investors: 2 Undervalued TSX Stocks to Buy Now for Total Returns

Top TSX dividend stocks are now on sale for RRSP investors seeking attractive total returns.

Read more »

TFSA and coins
Dividend Stocks

2 Beaten-Down Stocks to Buy for Your TFSA

Two beaten-down, but high-yield TSX stocks are profitable options for TFSA investors.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

Inflation Soars to 7.7%: 1 Dividend Stock to Buy Now

Enbridge (TSX:ENB)(NYSE:ENB) stock looks like a magnificent dividend stock to help Canadians deal with inflation at 7.7%.

Read more »

Dividend Stocks

RRSP Investors: 2 Oversold Dividend Stocks to Buy Now for Total Returns

These great Canadian dividend stocks look cheap today for an RRSP focused on total returns.

Read more »

Volatile market, stock volatility
Dividend Stocks

2 Dividend Stocks to Own When the Market Is in Turmoil

Two TSX stocks can sustain dividend payments, even if the present market turmoil extends longer than expected.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Passive-Income Stocks to Help You Through This Market Correction

These three passive-income stocks offer stellar dividends around 6% to help get you to the other side of this market…

Read more »

Coworkers standing near a wall
Bank Stocks

Policy Rate: 2 More Hikes After July 2022 to Reach Neutral Level

The Bank of Canada might need three more rate hikes beginning in July 2022 to reach neutral levels.

Read more »