Gold: it’s the safe haven that investors flock to in times of uncertainty. It is a good store of value, and it is globally recognized as a safe haven. Copper: it’s a valuable metal that is used and needed in many different applications, such as electrical wiring and renewable energy. Clearly, exposure to materials stocks is a good idea.
Here are two that I’d buy on any dip in price.
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Agnico-Eagle Mines
My favourite gold stock to buy is Agnico-Eagle Mines (TSX: AEM). This is mainly because of two simple facts: the company has little political risk and world-class operations.
Let’s tackle the political risk issue first. Agnico-Eagle has chosen its areas of operation very carefully, with potential risks as an important deciding factor. This is what has motivated the company’s decisions. And it is what has made it focus only on mines that are all in politically safe, pro-mining jurisdictions.
This has always meant a lot, but today, the relevance and benefits of this focus have rarely been clearer. Agnico’s mines operate without disruptions caused by civil unrest and/or government interference. This leads to stable operations and cash flows.
And this has been what Agnico-Eagle Mines has been living. In the last five years, Agnico has seen its revenue more than double to $8.3 billion and its net income more than triple to $1.9 billion. Also, its operating cash flow has increased 232% to $3.9 billion and its annual dividend more than doubled to $2.32 per share.
In summary, Agnico-Eagle Mines is trading near all-time highs right now, but this is one gold stock that I’d definitely buy on a dip.
Teck Resources
For Teck Resources (TSX: TECK.B), 2024 was a transformational year. The sale of its coal business brought significant cash to the company and cemented its transformation into a metals company that focuses on copper and zinc.
The copper business is benefitting from positive supply/demand fundamentals. This means that Teck’s transformation and renewed focus could not have come at a better time. The copper market is expected to be undersupplied over the next few years as supply disruptions and increases in demand have taken hold. As a result, copper prices have been rallying and are up almost 80% in the last five years.
Teck has been taking advantage of this state of affairs really nicely. In 2024, the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) more than doubled to $2.9 billion. This was the result of record copper production and higher copper prices.
With this, this materials stock was able to pay out record dividends, with $1.8 billion returned to shareholders in 2024 — $1 per share in dividends and $1.15 billion in share buybacks. Also, the company’s debt balance was significantly reduced, and copper projects were advanced.
Looking ahead, Teck Resources is expecting significant cash flows in 2025 as its Quebrada Blanca (QB) mine ramps up its production and as copper grades improve.
The bottom line
Adding Agnico-Eagle Mines and Teck Resources when they dip in price can give you good exposure to materials stocks. This provides diversification to your portfolio so that it’s able to thrive in all economic and market scenarios.
