Copper is having a strong year, and Southern Copper Corporation (SCCO) is benefiting. COMEX copper futures have gained more than 17% in 2026, reaching a record near $6.90 per pound on Aug. 6.
Tariff concerns, supply limits in Congo, and mine disruptions in Chile have helped keep copper prices elevated. Southern Copper followed that trend with its best quarter yet. Its second-quarter 2026 net sales reached a record $4,289.0 million, up 40.6% from a year earlier, while net income rose 71.6% to a record $1,670.0 million.
The S&P 500 Index ($SPX) has gained 13.70% so far this year, but Southern Copper has done far better. SCCO shares were up almost 30% year-to-date (YTD) in early August, more than twice the S&P 500’s return. The company also recently raised its quarterly cash dividend to $1.10 per share, equal to a forward annual payout of $4.40 and a 2.26% yield.
With copper prices high, profits rising, and the stock beating the broader market, is Southern Copper still worth adding to a dividend portfolio?
Record Profits Bolster SCCO’s Dividend
Southern Copper mines copper, as well as molybdenum, zinc, and silver. That gives the company more than one source of revenue, though copper remains its main driver.
SCCO shares have gained 91% over the past 52 weeks and 29.95% so far in 2026.
After that run, the stock is not cheap. It trades at 25.54 times forward price-to-earnings, well above the materials sector average of 15.30 times.
The dividend adds to the appeal, but investors should keep it in perspective. Southern Copper pays an indicated annual dividend of $4.80 per share, giving the stock a 2.56% yield, compared with the materials sector average of 2.82%. Its forward payout ratio is 53.82%, and payments are made quarterly.
Southern Copper has increased its dividend for only one year, so this is not a proven long-term dividend-growth stock. The latest payout included a $1.10 cash dividend and a 0.0120-share stock dividend. Both are payable Aug. 27 to shareholders of record on Aug. 11. Based on Southern Copper's July 16 share price of $177.32, management valued the combined payout at $3.23 per share.
The dividend is currently backed by strong earnings. Second-quarter sales rose 40.6% from a year earlier to a record $4.29 billion, while net income increased 71.6% to $1.67 billion. Its net margin improved to 38.9%, and adjusted EBITDA rose to $2.86 billion, with a 66.6% margin. Higher prices for copper, molybdenum, zinc, and silver offset a 1.5% drop in copper sales volume.
For the first half, sales increased 38.4%, net income rose 69.2%, and operating cash flow more than doubled to $3.68 billion. Copper production fell 3.8% to 461,206 tons because of lower ore grades in Peru, but by-product credits pushed cash costs to negative $0.03 per pound. That cash flow supported $864.7 million in first-half capital spending, though dividend strength will still depend heavily on metals prices.
Copper Growth Story Gains Momentum
Southern Copper is working to grow copper output through its own project pipeline instead of buying assets. The company plans to spend more than $20.5 billion over the next decade to raise annual copper production to about 1.6 million tons by 2033. That would be a 6.6% annual growth rate from 2025 levels. About $10.3 billion of the planned spending is set for Peru. Southern Copper says its large copper reserve base gives it room to grow while keeping production costs competitive.
Tía María is a major part of the plan. The project in Arequipa, Peru, was about 25% complete in early 2026 after years of delays and is now under construction. It is expected to produce 120,000 tons of SX-EW copper cathode a year. Southern Copper expects Tía María to add meaningfully to output as it works toward producing more than 1 million tons of copper by 2029.
Mexico is important to the growth plan. In April, Southern Copper said it was discussing a $10.2 billion investment program with Mexico’s federal government. The plan includes the Angangueo and Chalchihuites projects and the $1.1 billion Empalme smelter. It includes El Pilar, an SX-EW copper project expected to produce 36,000 tons a year starting in 2029.
What Wall Street Expects Next
Southern Copper is expected to report third-quarter results on Oct. 27. Wall Street expects earnings of $1.81 per share, up 34.07% from $1.35 a year ago. For all of 2026, the average estimate is $7.61 per share, which would be 45.23% higher than the $5.24 reported in 2025.
Goldman Sachs changed its view on April 10, upgrading Southern Copper from “Sell” to “Neutral” and raising its price target to $178 from $142.79. The firm believes a tight copper supply has created a larger scarcity premium. It pointed to Southern Copper's long-life reserves and low costs, saying those strengths support the roughly 65% premium the stock has historically traded at compared with large mining peers. Goldman Sachs added that the company could hold up better than its peers if copper prices weaken.
Still, most analysts remain cautious after the stock’s strong run. Among 12 analysts, a consensus gave Southern Copper a “Moderate Sell” rating, with average target price of $164.12. That represents an 11.6% downside from current levels.
Conclusion
Southern Copper is worth watching, but it is not an obvious “Buy” after its outsized 2026 rally. Record profits, low cash costs, a supported dividend, and a credible pipeline led by Tía María give SCCO a stronger fundamental base than many copper peers. Still, the stock’s premium valuation and analyst targets pointing below the current share price argue for patience. My base case is for shares to trade sideways to lower in the near term as investors lock in gains and reassess copper prices, with the longer-term direction depending on whether high metal prices and project execution hold up.
