Top Mining Stocks for Q1 2022

Investing

Many investors historically have turned to safe haven assets such as precious metals in times of economic and political turmoil. One way to gain exposure is by owning companies in the metals and mining industry, which are involved in the exploration, extraction, and sale of metals and other minerals. These materials are used in a wide range of applications in jewelry making, industry, technology, aviation, aerospace, and more. Some of the industry’s biggest companies globally include Franco Nevada Corp. (FNV) and Wheaton Precious Metals Corp. (WPM).

Mining companies have underperformed the broader market in the last year. The benchmark SPDR S&P Metals & Mining ETF (XME) has provided 1-year trailing total returns of 9.5% compared with 21.1% for the Russell 1000 Index. All figures throughout are as of Jan. 10, 2022.

Here are the top 3 mining stocks with the best value, the fastest earnings growth, and the most momentum.

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These are the mining stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Mining Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Torex Gold Resources Inc. (TXG.TO) CA$12.34 CA$1.1 3.5
Vale SA (VALE) 14.65 73.1 4.2
Equinox Gold Corp. (EQX) 6.63 2.0 4.4

Source: YCharts

  • Torex Gold Resources Inc.: Torex Gold Resources is a Canada-based intermediate gold producer. It engages in the exploration, development, and operation mining properties in Mexico. The company reported record annual gold production of 468,200 ounces for 2021. This figure was at the high end of the company’s production guidance and beat the prior annual record of 454,811 ounces in 2019.
  • Vale SA: Vale is a Brazil-based multinational mining company producing iron ore and alloys, gold, nickel, copper, and a variety of other minerals and materials. The company also owns and operates railroads and terminals.
  • Equinox Gold Corp.: Equinox Gold is a Canada-based, multi-asset mining company that operates entirely within the Americas. The company operates gold mines throughout Canada, the U.S., Mexico, and Brazil. It announced in mid-December that it has agreed to sell its Mercedes Gold-Silver Mine in Mexico to Bear Creek Mining Corp. (BCEKF) for $100 million. The transaction is anticipated to close in the first quarter of 2022.

These are the top mining stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Mining Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Taseko Mines Ltd. (TGB) 2.02 0.6 2,030 59.8
Teck Resources Ltd. (TECK) 31.20 16.6 1,350 83.4
First Quantum Minerals Ltd. (FM.TO) CA$31.00 CA$21.4 940.2 21.5

Source: YCharts

  • Taseko Mines Ltd.: Taseko Mines is a Canada-based diversified mining company. Taseko operates the the Gibraltar Mine, which is the second largest copper mine in Canada, producing an average of 140 million pounds of copper and 2.5 million pounds of molybdenum per year. Taseko reported results for its Q3 2021, ended Sept. 30, on Nov. 3. The company saw net income grow nearly 23-fold on a sharp increase in revenue YOY. One factor helping to drive this massive growth was a significant increase in copper production at the company’s Gibraltar pit.
  • Teck Resources Ltd.: Teck Resources is a Canada-based company that mines gold, copper, zinc, molybdenum, and metallurgical coal in the U.S., Canada and Latin America. The company also makes refined metals, specialized metal products, and other products. Profit attributable to shareholders for Q3 2021 was more than 13 times the prior-year quarter, as revenue rose 73.3% YOY. Gross profit for the company’s copper business unit more than doubled YOY, helping to drive overall performance.
  • First Quantum Minerals Ltd.: First Quantum Minerals is a Canada-based mining company. The company explores and develops properties to produce copper, and also has inventories of nickel, gold and cobalt. First Quantum operates mines in Turkey, Spain, Finland, Zambia, and Panama, among other locations.

These are the mining stocks that had the highest total return over the last 12 months.

Mining Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Emerita Resources Corp. (EMO.V) CA$3.49 CA$0.6 1,640
Lake Resources NL (LLKKF) 0.71 0.8 1,010
International Battery Metals Ltd. (RHHNF) 3.11 0.4 707.8
Russell 1000 Index N/A N/A 21.1
SPDR S&P Metals & Mining ETF (XME) N/A N/A 26.6

Source: YCharts

  • Emerita Resources Corp.: Emerita Resources is a Canada-based company engaged in the acquisition, exploration, and development of mineral properties. The company’s activities are focused on polymetallic deposits located in Spain.
  • Lake Resources NL: Lake Resources NL is an Australia-based company that explores and develops lithium brine projects. The company’s operations focus primarily on properties in Argentina. Lithium brines account for about three-fourths of the world’s production of lithium, which is used for electric car batteries and other products. In mid-December Lake Resources announced plans to launch a new 10-hole drilling program at three of its properties. The program aims to expand Lake Resources’ projects and potential resources.
  • International Battery Metals Ltd.: International Battery Metals is a Canada-based company that extracts lithium from geothermal brines, oil field brines, and other related properties. The company also acquires and develops technology focused on lithium brine extraction.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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