Investors looking to put some capital to work in dividend stocks certainly have a wide range of options to choose from. Companies that pay relatively high dividend yields, or provide consistent or predictable growth, tend to be found in specific sectors. In this article, I’m going to highlight two dividend-paying growth gems that have absolutely been on a tear of late, but have momentum I think can continue.
Here are two dividend stocks in the mining sector I think investors may want to consider for their mix of income and upside potential over the coming years, particularly for those who believe this bull market in metals can continue.
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Amerigo Resources
Amerigo Resources (TSX: ARG) is among the more intriguing copper miners, producing its copper and molybdenum in an innovative way. The company extracts these metals from tailings produced at the world’s largest underground copper mine, Codelco’s El Teniente.
The miner’s innovative approach towards mining waste has gathered significant attention as it offers an environmentally friendly and cost-effective solution for resource extraction. That’s one of the key reasons I like this relatively overlooked stock right now.
Of course, copper is one of the metals that hasn’t performed as well as precious metals and other commodities of late. My key thesis is that if economic activity picks up as many expect, companies like Amerigo could provide amplified upside in such an environment. So, for those betting on a no-landing or soft-landing scenario, this would be a top pick to buy and hold for a few years, in my view.
Additionally, the company has posted strong revenue growth, with Q2 revenue of $51.6 million representing a sharp increase from last year’s $32 million. So long as revenue and net income (which was also up considerably) continue to move in this direction, I think more upside is ahead for this stock that has done very well over the past four years.
Agnico Eagle Mines
A premier name in the gold mining industry of Canada, Agnico Eagle Mines (TSX: AEM) continues to be among the top mining stocks I’m pounding the table on. This company is the result of a merger with Kirkland Lake Mines a few years ago, a company with assets I’ve thought have been undervalued for years. The stock’s recent surge appears to indicate the market is starting to value these assets appropriately.
What sets Agnico apart from other industry giants is its focus on high-quality assets, strong operational performance, and a long mining life. And despite uncertainties proliferating all around the world, Agnico Eagle has showcased impressive growth in its earnings.
For the second quarter of 2024, the company reported revenue of $2.08 billion, a 21% increase from second-quarter revenue of 2023. Its net income stood at $472 million, which reflected its operational efficiency and ability to manage production costs in a volatile commodity market. Moreover, the company’s current dividend yield sits just shy of 2%, which is quite reasonable compared to the industry average.
Overall, these are two dividend stocks in the mining sector I think long-term investors looking for some defensive exposure right now may want to consider. If this bull market in metals revs up, these two stocks could really provide meaningful upside right now.
