Buying gold stocks is a sound strategy for safety-proofing a portfolio. With some big names in gold production paying dividends, it’s also a way to yield some passive income. But there are other metals out there, and other ways to invest in mining. From steep upside potential to a mix of growth and income, let’s take a look at three metals and why to get invested in them.
From a jump in inventory to the coronavirus, zinc investing is currently out of fashion. The classic contrarian play here would be to buy on weakness and hold for the long term. Sooner or later, the economy will right itself while supplies run down. While zinc prices may be approaching a four-year low, taking a long view could yield upside for the patient investor.
The thesis for buying a zinc miner for the long term is strong. The white metal has an impressive range of industrial uses and could see strengthening demand amid shrinking resources. A speculative play for zinc exposure would be Osisko Mining, currently down 10% on weakness in the metal. Osisko could see shareholders rewarded with total returns of around 47% by 2025.
Will uranium break out in the 20s? With the push for greener energy production ramping up, nuclear power could go mainstream. If and when the uranium bull awakens, investors sitting on shares in Cameco could see some upside.
As a pure play on uranium, Cameco is a rare buy. Value investors have a bargain on their hands here and can pick up a devalued stock in a currently unloved metal. Currently selling at a 37% discount off its fair value, Cameco could see a growth in income in the region of 40% annually.
Lundin Mining is a top stock for copper upside, plus it pays a dividend. Why buy copper? An integral element in the green economy, copper is used extensively for wiring and is a key component of alternative energy systems. Because of its recyclable properties, copper is a poster child for the green economy.
However, copper is also a natural resource in limited supply, making it a logical source of steepening upside. Lundin Mining sources the majority of its income from copper, but investors will be pleased to know that the company is diversified across other metals as well, such as nickel and zinc, plus some gold exposure.
Copper is also a major player in the electric vehicle boom, and for battery systems generally. Battery power storage for homes and businesses is likely to see a huge increase in demand in the coming months and years, as the world not only turns away from hydrocarbon fuels, but also responds to climate-induced emergencies.
The bottom line
The casual investor seeking relatively safe metals stocks should go for Lundin Mining. Cameco is a buy for energy investors keeping tabs on the green energy scene and seeking opportunities beyond the renewables sector. For zinc speculation, Osisko could be a rewarding investment down the line, especially as sources dry up in the future.
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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.