Mining stocks can be a solid source of long-term upside, and with risk still dominating the markets, the big-cap players are perhaps the strongest choices right now. Today, we’ll take a look at the four biggest miners by market cap and see which ones deserve a place in your growth portfolio.
Commodities are rising as investors seek safety
From consumer staples to precious metals, it’s a strong market for commodities at the moment as safe-haven assets offer shelter to investors spooked by an unusual level of uncertainty. Barrick Gold is often touted as the number one Canadian gold mining stock to buy for growth. Barrick is also a play for some moderate passive income, offering new investors a dividend that currently yields just under 1%.
Newmont Goldcorp is another mega-stock joining the top ranks through a recent merger. Paying a yield of 1.46% this is a go-to play for large-cap gold mining exposure on the TSX with some moderate but sturdy passive income thrown in. Just as Barrick boosted its gold production when it swallowed up Rangold, Newmont Goldcorp brings together two world-class miners in one solid stock.
While Newmont Goldcorp may be known primarily a gold stock to casual investors, its assets are far from limited to the yellow stuff. The miner also churns out copper, silver, zinc, and lead, and its footprint in Australia, Africa, and North and South America adds extra security through international diversification. Both Barrick and Newmont Goldcorp offer long-term growth in the Canadian mining space, with some pundits giving Barrick the edge.
The widest moats of the mining world
The world’s second in command when it comes to market share, Rio Tinto mixes low volatility, a healthy balance sheet, and outperforming returns and a superior dividend currently yielding 6.2% to make a world-class stock worthy of any commodities portfolio. Strongly diversified, the miner digs up everything from aluminum to diamonds. Investors looking for world-class mining expertise and a wide economic moat have a strong play for growth and income here.
Finally, BHP is the largest miner in the world by market cap, and if you can squeeze it into a metals and mining portfolio, it would certainly be a sturdy addition. Known as an all-around natural resources play, BHP is a top stock for commodity investors, and rewards shareholders with a solid 5.2% dividend yield.
A well-established distribution backed up with a solid track record make BHP a defensive play for the long term. As an investment in global natural resources, BHP operates not only in the metals sector but also that of energy and therefore goes toe to toe with the likes of Exxon Mobil and Chevron on the NYSE. While Rio Tinto pays the more sizeable yield, investors going for the biggest cap possible may want to bank on BHP.
The bottom line
From defensive commodities facing a surge as investors stare down uncertainty in the markets to some stable dividends, this mix of world-beating miners offers new and veteran investors some strong choices. With the potential for a market correction around the corner, stacking shares in large-cap miners that pay dividends is a strong defensive play for both income and assured 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 Victoria Hetherington has no position in any of the stocks mentioned.