Highly leveraged toward copper mining, Freeport-McMoRan could be a big player in a scenario of rebuilding and repairing old and battered projects, and it clearly would benefit from stronger demand and higher prices for industrial commodities.
Many across Wall Street see significant further upside potential to commodity prices over the next one to three years. In particular, this is due to accelerating demand growth, excluding China and supply constraints. They believe that this cycle is in the early stages, as key demand drivers should continue to grow. With copper rebounding recently, and the shares at a very reasonable entry point, those looking for commodity ideas could do well with this market leader.
The dividend yield here is 1.90%. The $55 Jefferies price target is well above the $38.51 consensus target. Freeport-McMoRan stock ended Thursday trading at $31.55.
Newmont
This is one of the largest mining companies and a solid buy for investors who are more conservative. Newmont Corp. (NYSE: NEM) is engaged in the production of gold.
Its North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in Nevada and Cripple Creek and Victor in Colorado. The South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Australia segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Africa segment consists primarily of Ahafo and Akyem in Ghana.
Newmont stock comes with a 4.81% dividend. BofA Securities has set its price objective at $64. The consensus target is $53.71, and shares closed on Thursday at $46.25.
ONEOK
The solid price of natural gas over the last year has helped to lift this top energy company, and it is a different way to play the energy sector. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying MLP, ONEOK Partners.
The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides higheturn growth opportunities.
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