The TSX today has finally surpassed the all-time highs that we haven’t seen since this time in 2022. Does that mean there are far fewer companies that Canadians can invest in for a deal?
Absolutely not. In fact, when it comes to finding a strong deal, there’s one dividend stock I think Canadian investors are sitting on, and that’s Lundin Mining (TSX: LUN).
Why it’s up
First off, let’s look at why Lundin stock is doing so well in 2024 and in the last year. The company has seen its share price surge 65% in the last 52 weeks at the time of writing this article. And that comes down to one thing: copper.
Lundin stock has a large focus on copper production, with over 60% of its operations dedicated to producing the mineral. Over the last year, the dividend stock has increased its production of copper further and further and has since hit record production.
During its full-year earnings report for 2023, Lundin stock reported record copper production of 314,798 tonnes during the year. And yet, the company plans on even more for 2024! Lundin stock expects to produce between a whopping 366,000 and 400,000 of copper for 2024.
Why copper?
This is where it gets interesting. There is clearly a reason that Lundin stock has upped its focus on copper and why investors are interested. First off, there is a copper shortage. This comes down to a few reasons. There continues to be a stagnant supply from copper mines that have seen slow growth in the last few years, whether it’s from permit and regulation delays or just lower-quality copper ore needing more processing.
There are also geopolitical issues, with political instability in some copper-producing countries causing disruptions to supply. All while copper demand continues to be not just in demand but in high demand. Copper is a vital resource. It’s needed for everything from the plumbing in your home to power electric vehicles.
What’s more, the need is only going to rise in the future. More digital and electrically powered products will mean more copper. This is why it’s an excellent idea to invest in a copper dividend stock like Lundin stock, which focuses primarily on the mineral.
The dividend
Now, when it comes to the dividend for this dividend stock, sure it certainly isn’t the highest. Lundin stock currently provides a dividend yield of 2.25% as of writing. Yet that’s almost double what you would get with most other mining stocks, as companies tend to hold onto cash in order to explore and further build up mines.
Yet, with Lundin stock, it seems as though the company is fairly set. While more exploration is certainly due to happen, with more mines coming online as well, the company is set in terms of copper demand. This isn’t a product that’s going to wax and wane, which allows it to create a strong dividend at a higher level than most other mining companies.
And don’t forget the company’s rising share price! Sure, shares are up around all-time highs. That’s significant. But it’s likely only going to rise further given the company’s outlook. And that momentum has already been seen quarter after quarter. So, if you’re looking for passive income, look beyond a dividend yield. Instead, consider both the 2.25% dividend yield and 65% in returns from Lundin stock.
