Many of the top Canadian mining stocks look to be on sale right now, as Trump tariff threats and fears of a looming recession weigh heavily. Indeed, the commodity plays may be rich with deep value, but Canadian investors are going to need to be patient, as the commodity scene often takes a very long time to turn a corner. Indeed, I’m usually a bigger fan of buying the commodity miners on the way up rather than the way down. That said, with various names flirting with multi-year depths, I’m inclined to believe that the severely oversold conditions put the odds in favour of investors willing to brave the dip.
Unless you’ve got a time horizon exceeding six years, though, the commodity plays could introduce more risk to a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio rather than taking away risk. Either way, if you like dividends and are willing to embrace further volatility, the following mining plays, I believe, are starting to look neglected and deeply undervalued.
Here are two names that may be worth hanging onto for those seeking greater diversification and deeper value and willing to ride out the continued waves.
Source: Getty Images
Nutrien
First, we have shares of fertilizer firm Nutrien (TSX:NTR), which are now down just over 47% from 2022 all-time highs. Indeed, it’s been a painful multi-year descent, and while a bottom may be elusive, I think that the firm’s tides are turning, even with the threat of tariffs and a recession.
Additionally, with various insiders scooping up shares amid recent tariff weakness, I’m inclined to think of NTR shares as timelier than they seem. Sure, it’s hard to predict commodity price fluctuations. Either way, Nutrien has impressive costs of product and will be around come the next boom. Personally, I view recent insider buys, which began earlier in the year, as a sign that shares are too cheap to pass up.
The stock boasts a nice 4.22% dividend yield and goes for just over 13 times forward price to earnings (P/E). With muted expectations for future quarters and a resilient retail business that could surprise, perhaps it’s time to think about nibbling into a full position on weakness.
Cameco
Up next, we have uranium producer Cameco (TSX:CCO), which has been selling off violently since the year began. Indeed, the nuclear power play was bound to step into the penalty box at some point. Either way, I view the 33% drop from recent highs as overdone.
As the focus shifts from tariffs back to artificial intelligence (who knows when that will happen?), look for Cameco stock to make up for lost time. Until then, it’s business as usual as the firm looks to improve its operating economics while readying for a potentially improving outlook for nuclear energy. Indeed, uranium producers aren’t too common, especially ones that are as well-run as Cameco. With a recent “outperform” rating issued by Bernstein, I’m inclined to view the name in a more positive light despite tariffs and their impact on the world economy.
All considered, I view CCO shares as a bargain worth unearthing for your TFSA as we head into the summer.
