Typically, mining companies pay hefty dividends, despite their cyclical business and high capex. For instance, Rio Tinto’s (RIO) dividend yield is over 6.5%, while BHP’s (BHP) is over 5%. When it comes to capital appreciation, though, both of these stocks have been laggards, and the total returns (after accounting for dividends) doesn't leave much to brag about. Metals, especially iron ore, trade well below all-time highs, which has dampened the price action of both these companies.
In the mining space, though, copper (HGU24) is one metal that stands out. The red metal hit its all-time high in May, despite growing noise over China’s slowdown, higher interest rates, and geopolitical tensions. Some analysts see copper as the “new oil,” and it's no wonder that mining giants have been looking to grab copper assets, as new discoveries have been scarce.
