Best Stock to Buy Right Now: Teck Resources vs First Quantum?

These two top basic materials stocks are top notch, but which edges out the other?

| More on:
construction workers talk on the job site

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When it comes to choosing between Teck Resources (TSX:TECK.B) and First Quantum Minerals (TSX:FM) on the TSX, it’s essential to consider recent performances, financial health, and future prospects. So today that’s just what we’ll do. Let’s delve into each to help you make an informed decision.

Created with Highcharts 11.4.3Teck Resources + First Quantum Minerals PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Into earnings

Teck Resources reported its third-quarter 2024 results on October 24, 2024, showcasing an adjusted profit of C$0.60 per share, surpassing analysts’ expectations of C$0.37 per share. This impressive performance was primarily driven by a significant increase in copper production at their Quebrada Blanca (QB) mine, which saw a 60% year-over-year rise to 115,000 metric tons. Additionally, the Canadian stock completed the sale of a 77% stake in its steelmaking coal unit to Glencore Plc, marking a strategic shift towards focusing on energy transition metals.

On the other hand, First Quantum Minerals reported its third-quarter 2024 results on October 22, 2024, with net earnings attributable to shareholders of $108 million, translating to $0.13 per share. This was a notable improvement compared to previous quarters, indicating a positive trend in their financial performance. However, it’s worth noting that the Canadian stock faced operational challenges, including a temporary suspension at its Kansanshi copper mine in Zambia due to a fatal accident.

Finances

Teck Resources boasts a robust financial position, with a market capitalization of approximately $31.5 billion as of September 30, 2024. The Canadian miner reported total cash holdings of $7.2 billion and a total debt of C$9.4 billion, resulting in a debt-to-equity ratio of 36.3%. Its current ratio stands at 2.9, indicating strong liquidity. Furthermore, Teck has been proactive in returning value to shareholders, distributing $720 million through dividends and share buybacks in the third quarter alone.

First Quantum Minerals, with a market capitalization of $15.6 billion as of September 30, 2024, reported total cash holdings of $783 million and a total debt of $7.9 billion, leading to a higher debt-to-equity ratio of 67.4%. The Canadian stock’s current ratio is 1.8, suggesting adequate liquidity but less cushion compared to Teck. Furthermore, First Quantum has been exploring strategic partnerships, including advanced talks with Saudi Arabia’s Manara Minerals to sell a minority stake in its Zambian copper and nickel assets, potentially bolstering its financial position.

Future outlook

Teck Resources is strategically positioning itself as a leader in energy transition metals, capitalizing on the growing demand for copper and other essential materials in renewable energy technologies. The successful divestment of its coal assets allows Teck to focus on expanding its copper production capabilities, aligning with global sustainability trends.

First Quantum Minerals is also poised to benefit from the increasing demand for copper, with significant operations in Zambia and ongoing projects aimed at boosting production. However, the company faces challenges, including operational disruptions and a higher debt load.

Bottom line

Both Teck Resources and First Quantum Minerals present compelling investment opportunities in the mining sector, particularly with the rising demand for copper driven by global energy transition initiatives. Teck’s strong financial health, strategic focus on energy transition metals, and consistent shareholder returns position it favourably. First Quantum’s growth potential is evident, but it faces higher leverage and operational challenges that warrant careful consideration.

As always, it’s advisable to conduct thorough research and consider your investment objectives and risk tolerance before making a decision. Consulting with a financial advisor can provide personalized insights tailored to your financial goals.

Just Released! 5 Stocks Under $50 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share.

Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

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 Amy Legate-Wolfe 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.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Stocks for Beginners

Stocks for Beginners

Dip Buyers Could Win Big: The Best Canadian Stocks to Buy Now

These two growth stocks have taken hits recently, but their fundamentals remain strong, and their growth prospects are intact.

Read more »

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

Paper Canadian currency of various denominations
Stocks for Beginners

2 Canadian Value Stocks for 2025

There's a fair bit to consider when looking at value stocks, so let's look at two that fit the bill.

Read more »

data analyze research
Stocks for Beginners

Smart Money’s Playbook for the Current Market Dip

This market dip might be worrying investors, so don't worry with these two stocks.

Read more »

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »