When stock markets pull back, it often creates a golden opportunity to pick up strong companies at a discount. One Canadian dividend stock that fits the bill is Lundin Mining (TSX: LUN). It’s currently trading around $11.90, which puts it roughly 34% below its 52-week high of $17.97. That kind of dip tends to make long-term investors perk up, especially when the dividend stock in question still has solid financials, a healthy dividend, and long-term relevance in an essential global industry.
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The stock
Lundin Mining is a base metals producer with a focus on copper, nickel, and zinc. These materials may not be glamorous, but they’re critical for everything from construction to electric vehicles to infrastructure upgrades. The world simply can’t move forward without them. That makes Lundin’s business inherently important and worth watching closely.
In 2024, Lundin delivered record copper production of 369,067 tonnes. This hit its guidance right on the nose, showing the dividend stock’s ability to manage its assets efficiently even in a tricky commodity environment. It also reported $4.12 billion in revenue, with $3.42 billion from continuing operations. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $1.71 billion, showing strong cash-generating ability despite pressure from weaker commodity prices earlier in the year. These are not numbers from a company in trouble. They’re from a dividend stock managing its costs and operations well, even as market sentiment cools on the sector.
Now, if you’re looking for income, here’s the part that might grab your attention: Lundin pays a quarterly dividend of $0.09 per share. That adds up to an annual yield of about 3.04% based on its share price at writing. And unlike many mining companies that suspend or slash payouts when metal prices drop, Lundin has maintained its dividend consistently since initiating it in 2020.
Considerations
Of course, no dividend stock is without its challenges. Lundin reported a net loss of $203.5 million in 2024, largely driven by non-cash impairments on assets in Portugal and Sweden. But on an adjusted basis, earnings were actually $358.9 million. That kind of difference shows that the core business is still healthy and profitable, and the losses were largely accounting-driven, not a sign of deteriorating operations.
A big potential catalyst for Lundin moving forward is the planned sale of its European assets, specifically the Zinkgruvan and Neves-Corvo mines. These assets are older and lower-margin compared to its newer South American operations. Selling them would help simplify Lundin’s business and allow it to focus on its most profitable regions. Even more importantly, the deal is expected to reduce the company’s net debt significantly. In fact, management believes it could emerge from the transaction with no net debt at all on a pro-forma basis. That kind of financial flexibility is rare in the mining space and could open up opportunities for expansion or even future dividend growth.
From a valuation standpoint, the drop in Lundin’s share price has made it more appealing. You’re now getting a solid yield and long-term copper exposure at a much lower entry point. And while mining stocks can be volatile, copper has strong long-term fundamentals. The shift toward electrification, green energy infrastructure, and electric vehicles will all rely heavily on copper. That means companies like Lundin are likely to see steady demand over the coming decades, even if prices fluctuate along the way.
Bottom line
So, is this the perfect buy-and-hold dividend stock? Maybe not for everyone. It’s still in a cyclical industry, and you’ll want to be okay with ups and downs along the way. But if you’re building a long-term income portfolio and you’re looking for a dividend stock that’s temporarily out of favour but still fundamentally strong, Lundin Mining is a name worth considering.
You’re getting a dividend stock that’s down more than 30% from its highs, still profitable, still paying a solid dividend, and in the middle of a strategic shift that could unlock more value. That’s the kind of setup that can deliver both income today and upside tomorrow — not bad for a company that most people aren’t paying enough attention to right now.
