2 Top TSX Materials Stocks to Buy Right Now

Consider investing in these two TSX stocks if you want exposure to two valuable commodities through the stock market.

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A worker wears a hard hat outside a mining operation.

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The strong activity in the stock market since the start of this year might have made investing a more exciting prospect for many investors. After several rough periods in 2022, the year ended on a better note for the S&P/TSX Composite Index. The Canadian benchmark index carried the momentum forward in 2023, before the rally faded, as January ended.

As of this writing, the benchmark index has pulled back from its January 2023 high. While down by almost 3% from its January high, the broader market index is up by 3.83% year to date. The short-term pullbacks and rallies in the stock market will come and go.

Instead of focusing on potential gains in the next few weeks, eyeing long-term gains over the next few years can be a better approach to invest in the stock market.

While the headwinds might worry many investors, savvier Canadians understand some companies can still offer them excellent returns. Stock with resilient underlying business and potential to deliver stellar long-term returns.

Today, I will discuss two TSX stocks you can consider adding to your portfolio, given the current market environment. Materials stocks let you invest in companies producing raw materials pivotal to the global economy. Investing in the stock of such companies when share prices are down can set you up for long-term wealth growth through capital gains.

Investing in gold

Barrick Gold (TSX:ABX) is a $38.35 billion market capitalization mining company stock. The company owns and operates 16 mining sites that are diversified across 13 countries.

While it produces several commodities like copper, gold production is the main contributor to its enormous cash flows. Barrick Gold is one of the largest gold producers worldwide, and it is well-established as a top-notch gold mining company.

A pullback in gold prices recently has weighed on miners like Barrick Gold. As of this writing, Barrick Gold stock trades for $21.77 per share — down by 35% from its 52-week high. The demand for gold has never diminished over the centuries, and the safe-haven asset tends to rise inversely to the broader market. The downturn might worry some investors, but it can be the right chance to invest in its shares for a discount.

Investing in lithium

Given the shift to green energy initiatives, electric vehicles, and other factors, lithium has become increasingly more valuable in recent years. Lithium stocks like Lithium Americas (TSX:LAC) offer investors a chance to gain exposure to the commodity through the stock market.

The $4.26 billion market capitalization company is not the most stable stock trading on the stock market. However, it might be worth adding to your portfolio.

Lithium-powered batteries have been around for a while. The metal is used to create batteries powering everything from phones to electric vehicles.

No matter what type of renewable energy we have in the future, the metal will be a part of it. Given that context, Lithium Americas stock presents itself as a strong long-term bet for massive wealth growth. As of this writing, it trades for $31.70 per share.

Foolish takeaway

Well-placed bets in the stock market can deliver exceptional returns to shareholders. It is essential to consider whether the underlying business has the fundamentals to suggest a higher chance of long-term success. Gold is a safe-haven asset that has stood the test of time, as a valuable commodity for centuries. Lithium has a massive demand due to the material’s role in the growing clean energy drive worldwide.

If you want exposure to valuable commodities through the stock market, Barrick Gold stock and Lithium Americas stock can be excellent investments for your portfolio today.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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