Southern Copper Corporation (NYSE:SCCO) has announced that it will be increasing its dividend on the 26th of August to US$0.90. This makes the dividend yield 4.2%, which is above the industry average.

See our latest analysis for Southern Copper

Southern Copper's Dividend Is Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, Southern Copper was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

Earnings per share is forecast to rise by 15.8% over the next year. If the dividend continues growing along recent trends, we estimate the payout ratio could reach 83%, which is on the higher side, but certainly still feasible.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from US$1.68 in 2011 to the most recent annual payment of US$2.80. This implies that the company grew its distributions at a yearly rate of about 5.2% over that duration. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Southern Copper has impressed us by growing EPS at 38% per year over the past five years. Southern Copper is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Southern Copper Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 5 warning signs for Southern Copper (1 can't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Vancouver, British Columbia–(Newsfile Corp. – August 3, 2021) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the "Company" or "EMX") is pleased to announce the filing on SEDAR of an amended and restated Timok Project Technical Report entitled: "NI 43-101 Technical Report – Timok Copper-Gold Project Royalty, Serbia" dated July 21, 2021 and with an effective date of December 31, 2020 prepared by Mineral Resource Management LLC ("MRM"). The amended and restated Technical Report can be found under the Company's profile at www.sedar.com. EMX holds an uncapped 0.5% net smelter return ("NSR") royalty on Timok's Brestovać license, which covers the Čukaru Peki copper-gold development project. The Timok Project is controlled and being developed by Zijin Mining Group Co., Ltd ("Zijin").

The amended and restated Timok Technical Report: a) restates the Timok Project resources and reserves for the Upper Zone and the resources for the Lower Zone as adopted from public disclosures by Zijin, which is the current owner and operator of the Timok Project. Zijin's Timok Project resources and reserves, disclosed in its 2020 Annual Report, have been conformed to the requirements of NI 43-101 and are materially identical to those of the previous operator Nevsun, which were referenced in the original Report; and b) removes the discussion of EMX's Brestovać West and Durlan Potok royalty properties from the section of the original Report entitled "Adjacent Properties" to comply with the requirements of NI 43-101. The discussion of these two royalty properties has been moved to the "Property Description and Location" section of this amended and restated Technical Report to accompany the discussion of the Brestovać royalty property.

Zijin is on a fast-track schedule for Timok's Čukaru Peki high sulfidation epithermal copper-gold development project. Recently, Zijin stated in a news release dated June 16, 2021, that it "recently obtained the trial production permit for the processing facilities issued by the Serbian Ministry of Mining and Energy, and have entered the trial production stage. At present, the construction of the processing facilities of the project has been completed, and trial production and operation, construction conclusion and greening, etc. are being conducted at full speed. It is planned that all work of the trial production stage shall be completed for submission to the Ministry of Mining for acceptance check before September of this year. This will achieve a smooth transition from mine infrastructure construction to production and operation". In addition to the Upper Zone, Čukaru Peki also hosts the underlying Lower Zone porphyry copper-gold resource project, which provides substantial exploration upside to EMX's Brestovać royalty asset.

The start of trial production and the imminent commencement of commercial production this year at the Upper Zone represents an important milestone for EMX which purchased its key 0.5% NSR royalty on the Timok Project in 2013, shortly after the discovery of the Čukaru Peki copper-gold deposit (see EMX News Release dated February 4, 2014). This acquisition serves as an example of how EMX leveraged its in-country expertise through early recognition of the potential value of the Čukaru Peki discovery, but also through the understanding of where key royalty interests were held by third parties that were available for acquisition.

EMX congratulates Zijin on its ongoing progress in developing the Timok Project, and looks forward to new advancements as the work programs progress.

Dr. Eric P. Jensen, CPG, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed, verified and approved the disclosure of the technical information contained in this news release.

About EMX. EMX is a precious, base, and battery metals royalty company. EMX's investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company's common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol EMX. Please see www.EMXroyalty.com for more information.

For further information contact:

David M. Cole
President and Chief Executive Officer
Phone: (303) 979-6666
Dave@EMXroyalty.com

Scott Close
Director of Investor Relations
Phone: (303) 973-8585
SClose@EMXroyalty.com

Isabel Belger
Investor Relations (Europe)
Phone: +49 178 4909039
IBelger@EMXroyalty.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release may contain "forward looking statements" that reflect the Company's current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as "estimate," "intend," "expect," "anticipate," "will", "believe", "potential", "upside" and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company's MD&A for the quarter ended March 31, 2021 (the "MD&A"), and the most recently filed Annual Information Form (the "AIF") for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC's EDGAR website at www.sec.gov.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/91785

Mount Gibson Iron Limited (ASX:MGX) shareholders have seen the share price descend 10% over the month. But that doesn't change the fact that shareholders have received really good returns over the last five years. Indeed, the share price is up an impressive 180% in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. The more important question is whether the stock is too cheap or too expensive today.

Check out our latest analysis for Mount Gibson Iron

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Mount Gibson Iron moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. Indeed, the Mount Gibson Iron share price has gained 83% in three years. During the same period, EPS grew by 8.4% each year. Notably, the EPS growth has been slower than the annualised share price gain of 22% over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Mount Gibson Iron's key metrics by checking this interactive graph of Mount Gibson Iron's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Mount Gibson Iron, it has a TSR of 245% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Mount Gibson Iron provided a TSR of 15% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 28% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Mount Gibson Iron is showing 4 warning signs in our investment analysis , and 1 of those is significant…

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Val-d'Or, Québec–(Newsfile Corp. – August 3, 2021) – Abitibi Royalties Inc. (TSXV: RZZ) (OTC: ATBYF) ("Abitibi Royalties" or the "Company") is pleased to provide its Q2-2021 corporate update on its net smelter royalties (NSRs) at the Canadian Malartic Mine, Canada's largest gold mine, near Val-d'Or, Québec, cash generation, Project Generator Division and on its early stage royalties. The Company is unique among its peers due to its strong treasury, no debt, monthly dividend, share buyback program and by having the lowest outstanding common shares in the gold mining sector.

Q2-2021 ROYALTIES & CORPORATE HIGHLIGHTS

• Ramp construction at Canadian Malartic's Odyssey Underground Project is progressing ahead of schedule and below budget.

• Excavation of the Odyssey shaft collar and the concrete lining of the first 27 metres has been completed.

• Positive exploration results from Odyssey demonstrate the potential to increase estimated resources. The first underground exploration drill station was completed during Q2-2021 and underground drilling has commenced.

• Drill assays pending from key early-stage royalties including Menderes and Red Lake projects.

• Assisted in the Authier North Lithium Project option agreement where the Company holds a 1% NSR and is entitled to 15% of the net sales proceeds.

• Cash generated in Q2-2021 totaled approximately CDN$1.3 million. Treasury now stands at approximately CDN$52.5 million. The Company remains debt free.

• Monthly dividends for Q3-2021 declared. Monthly dividends total CDN$0.015 per share or CDN$0.18 per share annually. A total of 21 dividends have now been declared since September 2019, with the amount having been increased by 50%.

Royalties at Canadian Malartic Mine

The Canadian Malartic Mine, where Abitibi Royalties owns various NSRs and a net profit interest ("NPI"), is jointly operated by Agnico Eagle Mines Limited ("Agnico Eagle") and Yamana Gold Inc. ("Yamana"). Abitibi Royalties' NSRs and NPI cover portions of East Malartic (3% NSR), Odyssey (3% NSR), Sladen (3% NSR), Sheehan (3% NSR), Jeffrey (3% NSR), Barnat (3% NSR), Gouldie Zone (2% NSR) and the Charlie Zone (2% NSR). In addition, the Company holds a 1.5% NSR on the Midway Project and a 15% NPI on the Radium Property, which are all operated and located at, or proximate to, the Canadian Malartic Mine (Fig. 1).

1) Barnat Open Pit Production

The mine operators stated that throughout 2021 the mine will continue its transition from the Malartic pit to the Barnat pit where commercial production was declared on September 30, 2020. Additionally, the Canadian Malartic Mine is undertaking the required pit pushback to obtain the optimized ounces as per the revised open pit design. Abitibi Royalties holds a 3% NSR on the eastern portion of the Barnat pit (Fig. 1) which is expected to be the Company's main source of royalty revenue from 2021-2023 at Canadian Malartic.

2) Odyssey Ramp Development Ahead of Schedule & Below Budget

In Q1-2021, Agnico Eagle and Yamana announced a positive construction decision of the Odyssey Underground Project at the Canadian Malartic Mine. Construction of surface infrastructure and the portal in preparation for development of the ramp started in Q3-2020.

During Q2-2021, underground development of the ramp continued. Approximately 402 linear metres of ramp development were completed, which is ahead of schedule and at a lower development unit cost than anticipated. The ramp is designed to mine the upper zones of the Odyssey Project and provide further exploration access. During the current quarter, the first exploration drift is expected to advance, as well as the excavation of the first ventilation raise. The budget for the ramp is USD$23.4 million for 2021.

3) Odyssey Shaft Construction Now Underway

During Q2-2021, the operators announced that the excavation of the shaft collar and the concrete lining of the first 27 metres were completed. The concrete raft of the headframe and the slip form pour are expected to be completed in Q2-2021, while the structural steel installation is expected to start in Q4-2021. All of the mechanical and electrical purchase orders for the sinking hoist and auxiliary hoist have been issued. Both hoists are expected to be delivered and installed by Q4-2022. All surface construction activities are on target and shaft sinking is expected to resume in the second half of 2022 once the headframe construction and hoists installations are completed.

The operators have stated that the project requires modest capital in any given year that is manageable and fully funded using Canadian Malartic's cash on hand and free cash flow generation, and that no external funding is required.

4) Odyssey Exploration Drilling Returns Positive Results

On July 8, 2021, Agnico Eagle announced an update on the Odyssey exploration drilling, which included two drill holes from the Chert Zone. The Chert Zone, was historically part of the East Malartic Mine. The drill holes included 7.0 gpt gold over 77.9 metres and 6.1 gpt gold over 28.2 metres at a depth of approximately 900 metres below surface. Both holes are reported as core length, with the true thickness currently unknown. The results in the Chert Zone suggest the potential to add additional mineral resource between the East Malartic and East Gouldie deposits. Also, as previously reported by the Company, regional exploration at the Radium-Nord property has also returned significant gold values from the Radium gold zone (Fig. 1) and confirmed the modelled geometry. The zone remains open for expansion. No assays from Radium-Nord drilling have yet been published by the operators of Canadian Malartic.

The operators also announced that the first underground exploration drill bay was completed in Q2-2021 and underground drilling started on July 7, 2021. The underground drill program will aim to define and validate the upper levels of the Odyssey South Zone and to better understand the local geology of the Internal Zones at Odyssey.

Early Stage Royalties

1) Menderes Gold Project, Turkey (3% NSR)

On June 10, 2021, Frontline Gold Corporation ("Frontline") announced that drilling had commenced on the Menderes Gold Project in Turkey (Fig. 2). The Menderes Gold Project is considered the Company's most prospective early stage royalty due to 1) its close proximity to known mineralization and mining infrastructure and 2) the size of the Company's royalty (3% NSR).

The drill program at Menderes will concentrate on the southeastern extension of the Kokarpinar vein system, part of the Eldorado Gold Corporation's ("Eldorado") Efemcukuru Mine that has been in production since 2011. The Efemcukuru Mine is forecasted to produce 110,000 ounces of gold in 2021 at an average grade of 6.6 gpt gold. Frontline has reported that drilling by Eldorado has been testing for the Kokarpinar extension within 20-100 metres of Frontline property boundary. The Frontline exploration program will initially consist of a 1,000 metres of drilling.

2) Red Lake Project, Ontario (1% NSR)

On April 14, 2021, Pacton Gold Inc. ("Pacton") announced that it had completed its 8,919 metre (24 holes) winter drill program at the Red Lake Project in Ontario, with assays pending. Abitibi Royalties holds a 1% NSR on multiple areas being targeted by Pacton. Pacton also announced that they have begun their summer surface exploration program, including soil sampling, prospecting, till sampling, mapping and outcrop stripping. These exploration activities are designed to improve targets for existing prospects and generate additional drill targets for the next winter campaign.

3) Malartic South & Cadillac Shear Property, Quebec (1-3% NSR)

The Company has been informed by Eagle Ridge Mining Ltd. ("Eagle Ridge") that they have completed separate NI 43-101 reports for the Malartic South and Cadillac Shear projects in Quebec. The Malartic South Project adjoins the Canadian Malartic Mine to the south and the Cadillar Shear is located near the Goldex Mine. The NI 43-101 reports' recommendations for the combined projects include a phased exploration program totalling approximately CDN$3.6 million. Eagle Ridge is currently seeking a partner in order to advance the projects.

Project Generator Division

As part of the Company's strategy to expand its royalty holdings through organic growth, Abitibi Royalties has set up a Project Generator Division with the view to selling or optioning mineral projects while retaining a royalty. The initiative is designed to generate a competitive return on capital, expand the Company's royalty holdings, while employing a limited amount of working capital. The Company will evaluate paying the cash generated from the Project Generator Division to shareholders through additional dividend increases.

1) Authier North Lithium, Quebec (1% NSR)

During Q2-2021, Abitibi Royalties assisted Eagle Ridge in identifying possible partners for the Authier North Lithium Project (Fig. 3). On July 16, 2021, it was announced that Eagle Ridge had entered into an agreement with Power Metal Resources plc ("Power Metals"). In addition to the 1% NSR Abitibi Royalties holds on the property, the Company is entitled to 15% of the net sales proceeds received by Eagle Ridge. During the two-year option, Abitibi Royalties is entitled to approximately CDN$35,000 in cash and shares, plus an additional 0.1875% NSR (for a combined 1.875% NSR). A total of 0.075% of Abitibi Royalties' NSR can be repurchased by Power Metals for CDN$75,000. The Authier North Lithium Project adjoins the Sayona Quebec Inc. Authier Project, located approximately 40 kilometres north of Malartic and is in the process of being permitted for mining.

Power Metals intends to complete geophysical surveys that aim to model the possible down-dip extension of the lithium bearing pegmatite onto the Authier North Lithium Project.

2) Upper Red Lake Project, Ontario

As announced on February 16, 2021, Abitibi Royalties has entered into an option agreement with Xplore Resources Corp. ("Xplore"), where Xplore can earn 100% interest in the Upper Red Lake Project by issuing CDN$337,500 in common shares during a two-year period and granting Abitibi Royalties a 1.5% NSR.

On July 26, 2021, Xplore announced their plans for the Phase 1 exploration program at the Upper Red Lake Project. Phase 1 includes a heliborne high-resolution magnetic ("MAG") survey. The survey will be used to better define mineralization and aid in the future drill targeting for Phase 2.

Other Corporate Activity

1) Q2-2021 Royalty Payment & Cash Generation

During Q2-2021, the Company's cash generation¹ totaled approximately CDN$1.3 million, with approximately CDN$0.5 million coming from the Company's 3% NSR at the Canadian Malartic Mine. Royalties from the open pit portion of the Canadian Malartic Mine commenced at the end of Q4-2018 (the Company's core underground royalties at Odyssey are under construction and not yet in production). The remainder of Company's cash generation during the quarter came from options premiums² (CDN$0.7 million) and dividends (CDN$0.2 million).

The Company has 12,462,610 shares outstanding and also on a fully diluted basis. As of July 30, 2021, the Company's treasury of cash and marketable securities totaled approximately CDN$52.5 million³.

2) Q3-2021 Dividend Payments to Shareholders

On December 7, 2020, the Company's board of directors approved a 20% dividend increase from CDN$0.15 to CDN$0.18 per common share on an annualized basis (CDN$0.015 monthly). The monthly dividend payments for Q3-2021 are shown in Table 1. below. The September 2021 payment will represent the 21st dividend payment made to shareholders since the Company's adoption of a dividend policy in September 2019. The full amount of the dividends will be designated as an "eligible dividend" as defined in the Income Tax Act (Canada).

Table 1. Q3-2021 Dividend Schedule

About Abitibi Royalties

Abitibi Royalties owns various royalties at the Canadian Malartic Mine near Val-d'Or Quebec. In addition, the Company is building a portfolio of royalties on early stage properties near producing mines and generating mineral projects for sale or option. The Company is unique among its peers due to its strong treasury, no debt, monthly dividend, share buyback program and by having the lowest outstanding common shares in the gold mining sector.

Technical Information

Although the northwest portion of the Odyssey South Zone and certain Internal Zones at the Canadian Malartic Mine are located within the areas covered by the Company's NSR royalties, Abitibi Royalties can make no assurances that all or any of the current underground drilling will target these areas. Similarly, the Company can make no assurances that the drill results from the Chert Zone or the drilling recently completed by Pacton at their Red Lake Project are respectively contained within the Company's NSR royalty boundary.

QUALIFIED PERSON

Mr. Glenn Mullan, Chairman, is the Qualified Person (as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects) who has reviewed this news release based solely on the public disclosure by the various companies and without independent verification and is responsible for the technical information reported herein.

1. Non-IFRS Measure: The Company has calculated the measure "cash generation" as royalties earned in the quarter and cash received from option premiums, dividends and capital gains. This is a non- IFRS measure as IFRS requires the Company's cash in its financial statements to be recognized using the accrual basis of accounting. The Company believes that this measure, while not a substitute for measures of performance prepared in accordance with IFRS, provides investors an improved ability to evaluate the underlying performance of the Company.

1. For more information on the Company's investments, dividends, covered call and put contracts, please see the Company's Q1-2021 MD&A and Q1-2021 Financial Statements, which can be found on the Company's website www.abitibiroyalties.com.

1. Investment values calculated based on closing prices and certain share price limits due to call option contracts as of July 30, 2021.

For additional information, please contact:

Shanda Kilborn – Director, Corporate Development
2864 chemin Sullivan
Val-d'Or, Québec J9P 0B9
Tel.: 1-888-392-3857
Email: info@abitibiroyalties.com

Forward Looking Statements:

This news release contains certain statements that may be deemed "forward-looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or realities may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Figure 1. Royalties at the Canadian Malartic Region – Plan Map

To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/3322/91909_4a9ed48c74adbbd0_004full.jpg

Figure 2. Royalties at the Menderes Gold Project

To view an enhanced version of Figure 2, please visit:
https://orders.newsfilecorp.com/files/3322/91909_4a9ed48c74adbbd0_005full.jpg

Figure 3. Authier North Lithium, Quebec (1% NSR)

To view an enhanced version of Figure 3, please visit:
https://orders.newsfilecorp.com/files/3322/91909_4a9ed48c74adbbd0_006full.jpg

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/91909

Most readers would already be aware that Grange Resources' (ASX:GRR) stock increased significantly by 44% over the past three months. Given the company's impressive performance, we decided to study its financial indicators more closely as a company's financial health over the long-term usually dictates market outcomes. In this article, we decided to focus on Grange Resources' ROE.

Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital.

View our latest analysis for Grange Resources

How Is ROE Calculated?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Grange Resources is:

29% = AU$203m ÷ AU$712m (Based on the trailing twelve months to December 2020).

The 'return' refers to a company's earnings over the last year. So, this means that for every A$1 of its shareholder's investments, the company generates a profit of A$0.29.

Why Is ROE Important For Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.

Grange Resources' Earnings Growth And 29% ROE

First thing first, we like that Grange Resources has an impressive ROE. Secondly, even when compared to the industry average of 15% the company's ROE is quite impressive. Under the circumstances, Grange Resources' considerable five year net income growth of 52% was to be expected.

As a next step, we compared Grange Resources' net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 29%.

Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Grange Resources is trading on a high P/E or a low P/E, relative to its industry.

Is Grange Resources Efficiently Re-investing Its Profits?

Grange Resources has a really low three-year median payout ratio of 20%, meaning that it has the remaining 80% left over to reinvest into its business. This suggests that the management is reinvesting most of the profits to grow the business as evidenced by the growth seen by the company.

Additionally, Grange Resources has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders.

Conclusion

Overall, we are quite pleased with Grange Resources' performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Let's not forget, business risk is also one of the factors that affects the price of the stock. So this is also an important area that investors need to pay attention to before making a decision on any business. To know the 2 risks we have identified for Grange Resources visit our risks dashboard for free.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Greenlight Capital, an investment management firm, published its "Global Growth Fund" second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of -2.9% was recorded by the fund for the second quarter of 2021, compared to 8.5% for its e S&P 500 benchmark. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.

In the Q2 2021 investor letter of Greenlight Capital, the fund mentioned Teck Resources Limited (NYSE: TECK), and discussed its stance on the firm. Teck Resources Limited is a Vancouver, Canada-based mining company, that currently has an $12.1 billion market capitalization. TECK delivered a 25.84% return since the beginning of the year, extending its 12-month returns to 125.47%. The stock closed at $22.84 per share on July 30, 2021.

Here is what Greenlight Capital has to say about Teck Resources Limited in its Q2 2021 investor letter:

Mark Agnor/Shutterstock.com

Based on our calculations, Teck Resources Limited (NYSE: TECK) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TECK was in 30 hedge fund portfolios at the end of the first quarter of 2021, compared to 31 funds in the fourth quarter of 2020. Teck Resources Limited (NYSE: TECK) delivered a 7.89% return in the past 3 months.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.

Disclosure: None. This article is originally published at Insider Monkey.

VANCOUVER, BC, Aug. 2, 2021 /CNW/ – John Barakso announced today that, as a result of the previously announced private placement financing of Finlay Minerals Ltd. ("Finlay") that closed on July 9, 2021 (the "Financing"), his subsequent exercise of stock options to acquire 350,000 common shares of Finlay ("Shares") on July 13, 2021 for an aggregate exercise price of $17,500 and, indirectly through Baril Developments Ltd., a private company controlled by Mr. Barakso ("Baril"), his acquisition of 1,358,332 Shares on July 31, 2021 pursuant to the exercise of share purchase warrants for an aggregate exercise price of $135,833.20, Mr. Barakso's holdings were reduced on a fully-diluted basis from 60.30% prior to the Financing to 41.30%.

Mr. Barakso had made no changes to his direct or indirect holdings since his last Early Warning Report, dated December 20, 2019, and did not participate in the Financing. Pursuant to the Financing, Finlay issued 26,444,748 Shares, 26,676,748 warrants and 3,022,646 agent's options. As a result of the Financing, Mr. Barakso's direct and indirect holdings were reduced from 58.30% on a non-diluted basis to 45.42% subsequent to the Financing; Mr. Barakso's direct and indirect holdings were reduced on a fully-diluted basis from 60.30% prior to the financing to 41.30% subsequent to the financing.

Immediately prior to the exercise of the stock options on July 13, 2021, (a) Mr. Barakso, directly and indirectly through Baril, Electrum Resource Corporation, a private company controlled by Mr. Barakso ("Electrum") and the John Barakso Alter Ego Trust, a trust controlled by Mr. Barakso (the "Trust"), held 54,871,753 Shares, representing approximately 45.42% of the then total issued and outstanding Shares on a non-diluted basis; (b) assuming the exercise in full of all of the convertible securities of Finlay held directly or indirectly through Baril, Electrum and the Trust by Mr. Barakso, Mr. Barakso would have held, directly and indirectly, 69,973,835 Shares, representing approximately 41.30% of the then total issued and outstanding Shares of Finlay on a fully-diluted basis.

Immediately following the exercise of warrants on July 31, 2021, (a) Mr. Barakso holds, directly and indirectly through Baril, Electrum and the Trust, 56,580,085 Shares, representing approximately 45.99% of the total issued and outstanding Shares on a non-diluted basis; (b) assuming the exercise in full of all of the convertible securities of Finlay held directly or indirectly through Baril, Electrum and the Trust by Mr. Barakso, Mr. Barakso would hold, directly and indirectly, 69,973,835 Shares, representing approximately 41.30% of the total issued and outstanding Shares on a fully-diluted basis; (c) Baril holds 29,436,051 Shares, representing approximately 23.93% of the issued and outstanding Shares on a non-diluted basis; and (d) assuming the exercise in full of all of the convertible securities of Finlay held by Baril, Baril would hold 39,436,051 Shares, representing approximately 23.28% of the total issued and outstanding Shares on a fully-diluted basis.

In the future, Mr. Barakso may, directly or indirectly, acquire additional Shares or other securities of Finlay or dispose of such shares and/or securities subject to a number of factors, including, without limitation, general market and economic conditions and other investment and business opportunities available.

Baril is organized under the laws of the province of British Columbia. Its principal business is that of a holding company. Mr. Barakso and Baril have an address of 920 Leovista Avenue, North Vancouver, BC V7R 1R2.

A copy of the Early Warning Report to which this press release relates can be obtained from Ilona Lindsay at 604-684-3099 or on the SEDAR profile of Finlay Minerals Ltd. at www.sedar.com. Finlay's head office is located at Suite # 615 – 800 West Pender Street, Vancouver, BC V6C 2V6.

SOURCE Finlay Minerals Ltd.

View original content: http://www.newswire.ca/en/releases/archive/August2021/02/c5392.html

(Bloomberg) — The record rally in steel has further to run as U.S. producers vow not to get burned again by ramping up too fast.

Prices for hot-rolled coil futures in the U.S. have surged more than 80% in 2021, the best start to a year in records going back to 2009 and eclipsing gains in other all major commodities. Prices touched an all-time high last week. Despite customer pleas for more metal, steelmakers that paid steep costs to shut down furnaces in the pandemic have yet to announce new plans to build out capacity, focusing instead on generating record profits for shareholders.

The surge in steel, used in everything from cars to washing machines to toasters, is adding to concerns that rising costs could imperil a fragile economic recovery as manufacturers struggle with materials shortfalls and inflation gauges jump. Last month, tractor-maker AGCO Corp. said farmers are slowing purchases amid soaring steel prices, while Siemens Gamesa Renewable Energy SA’s profit warning rippled though shares of Europe’s biggest wind-turbine producers.

“The finance departments have a voice they didn’t used to have, so the industry is more driven for profit than it is for production now,” said Michelle Applebaum, an independent steel consultant who has covered the industry for 40 years. “It’s a real culture change.”

U.S. steel consumption is on pace to be about 104 million tons this year, and about 108 million tons in 2022, according to Bloomberg Intelligence analyst Andrew Cosgrove. With domestic steelmakers only producing about 87 million this year and 91 million next year, and planned capacity coming online by the end of next year to be about 4.6 million tons per annum, customers will continue to compete for available metal.

To make matters more difficult, soaring demand across the rest of the globe from China to Europe means U.S. buyers will be battling for imports too. Meanwhile, U.S. tariffs remain on shipments from abroad, hurting affordability.

Cleveland-Cliffs Inc. Chief Executive Officer Lourenco Goncalves told investors last quarter that he wasn’t going to produce more tons because it will eventually lead to oversupply and cause prices to deteriorate.

“It’s value, it’s not volume,” he said.

To be sure, not everyone sees the metal rallying through the rest of the year. Automotive demand isn’t going to be as big as initially projected, as semiconductor snags have forced the industry to build inventories as they wait to be able to make the vehicles, and the market has basically recovered to pre-pandemic demand levels, according to Keybanc Capital Markets analyst Phil Gibbs.

“The supply-demand imbalance is now marching toward equilibrium: this is the last fever pitch of the tightness,” Gibbs said. “Our view on actual demand is that we believe you’re in a modest oversupply situation. The only reason we’re not seeing it in the price is that mills have reasonably long backlogs they’re working through.”

U.S. steelmakers told investors on second-quarter conference calls that backlogs are at historic highs, and that with demand expected to remain high through 2021, they’ll book record profits again in the third quarter. That outlook is further underpinning the outlook for a further rally in steel.

(Updates with record steel price, profit warnings in second and third paragraphs)

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Individual and institutional investors as well as advisors are invited to log-on to VirtualInvestorConferences.com to view presentations

NEW YORK, Aug. 2, 2021 /PRNewswire/ — Virtual Investor Conferences, the leading proprietary investor conference series today announced that the presentations from the July Green Energy & Precious Metals lnvestor Conference are now available for on-demand viewing.

REGISTER OR LOGIN NOW TO VIEW THE PRESENTATIONS: https://bit.ly/37cWBqt

The company presentations will be available 24/7 for 90 days. Investors, advisors and analysts may download shareholder materials from the "virtual trade booth" for the next three weeks.

Participating Companies:

To facilitate investor relations scheduling, for more information about the program and to view a complete calendar of Virtual Investor Conferences, please visit www.virtualinvestorconferences.com.

About Virtual Investor Conferences^®
Virtual Investor Conferences (VIC) is the leading proprietary investor conference series that provides an interactive forum for publicly-traded companies to meet and present directly with investors.

A real-time solution for investor engagement, Virtual Investor Conferences is part of OTC Market Group's suite of investor relations services specifically designed for more efficient Investor Access. Replicating the look and feel of on-site investor conferences, Virtual Investor Conferences combine leading-edge conferencing and investor communications capabilities with a comprehensive global investor audience network.

View original content to download multimedia:https://www.prnewswire.com/news-releases/green-energy–precious-metals-investor-conference-presentations-now-available-for-on-demand-viewing-301345875.html

SOURCE VirtualInvestorConferences.com

A look at the shareholders of Fortescue Metals Group Limited (ASX:FMG) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of AU$75b, Fortescue Metals Group is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Fortescue Metals Group.

Check out our latest analysis for Fortescue Metals Group

What Does The Institutional Ownership Tell Us About Fortescue Metals Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Fortescue Metals Group does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Fortescue Metals Group, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Fortescue Metals Group. Our data shows that Tattarang Pty Ltd is the largest shareholder with 36% of shares outstanding. For context, the second largest shareholder holds about 9.0% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Fortescue Metals Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Fortescue Metals Group Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own AU$482m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, with a 32% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 3.2%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 9.0% of Fortescue Metals Group stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fortescue Metals Group better, we need to consider many other factors. Be aware that Fortescue Metals Group is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious…

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

TOKYO, August 02, 2021–(BUSINESS WIRE)–Rio Tinto and Komatsu are partnering to fast-track the development and implementation of zero-emission mining haulage solutions, including haul trucks.

Rio Tinto will conduct a pre-production trial of the new equipment at a Rio Tinto site and has the option to purchase some of the first trucks from Komatsu once they are commercially viable.

Alf Barrios, Rio Tinto’s Chief Commercial Officer said: "Rio Tinto and Komatsu have a shared history of partnership on innovation going back to when we built the world’s largest Komatsu autonomous haulage fleet in 2008."

"Our support of a trial, and the option to buy some of the first trucks from Komatsu, underscores our shared commitment to actively collaborate on product planning, development, testing and deployment of the next generation of zero-emission mining equipment and infrastructure as we look to decarbonise our business."

Rio Tinto is also one of the first companies to join Komatsu’s newly launched Greenhouse Gas (GHG) Alliance which has an initial target of advancing Komatsu’s power agnostic truck concept for a haulage vehicle that can run on a variety of power sources including battery and hydrogen.

Max Moriyama, President, Mining Business Division of Komatsu Ltd said Komatsu was honoured to continue to partner with Rio Tinto.

"Rio Tinto and Komatsu both recognise the critical role zero-emission haul trucks play in meeting the Greenhouse Gas (GHG) emission reduction goals for the mining industry and the need to focus on developing practical haulage solutions.

"We are looking forward to advanced collaboration with them," said Max.

Rio Tinto is also a founding patron of the Charge On Innovation Challenge, which is focused on solving the power distribution infrastructure needed to support zero-emission haul trucks.

"We know that addressing climate change effectively requires businesses, governments and society to work together. Our collaboration with Komatsu recognises the role zero-emission haul trucks will play in meeting the emission reduction goals of not only Rio Tinto, but the entire mining industry," said Alf.

About Rio Tinto

Rio Tinto produces high-quality iron ore, copper, aluminium, and minerals that have an essential role in enabling the low-carbon transition.

We have publicly acknowledged the reality of climate change for over two decades and have reduced our emissions footprint by over 30 percent in the decade to 2020.

We have set 2030 targets to reduce our absolute emissions by 15% and our emissions intensity by 30% relative to our 2018 baseline. These targets are consistent with a 45% reduction in absolute emissions, relative to 2010 levels, and the Intergovernmental Panel on Climate Change (IPCC) pathways to 1.5°C. They are supported by our commitment to spend approximately $1 billion on emissions reduction initiatives over the first five years of the ten-year target period. In 2020, we set new Scope 3 emissions reduction goals to guide our partnership approach across our value chain.

Read more about our approach to climate change: www.riotinto.com/invest/reports/climate-change-report

About Komatsu

Komatsu develops and supplies technologies, equipment and services for the construction, mining, forklift, industrial and forestry markets. For a century, the company has been creating value for its customers through manufacturing and technology innovation, partnering with others to empower a sustainable future where people, business and the planet thrive together. Frontline industries worldwide use Komatsu solutions to develop modern infrastructure, extract fundamental minerals, maintain forests and create consumer products. The company's global service and distributor networks support customer operations to enhance safety and productivity while optimizing performance.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210802005282/en/

Contacts

Please direct all enquiries to
media.enquiries@riotinto.com

Media Relations, UK
Illtud Harri
M +44 7920 503 600

David Outhwaite
M +44 7787 597 493

Media Relations, Americas
Matthew Klar
T +1 514 608 4429

Investor Relations, UK
Menno Sanderse
M: +44 7825 195 178

David Ovington
M +44 7920 010 978

Clare Peever
M +44 7788 967 877

Media Relations, Australia
Jonathan Rose
M +61 447 028 913

Matt Chambers
M +61 433 525 739

Jesse Riseborough
M +61 436 653 412

Investor Relations, Australia
Natalie Worley
M +61 409 210 462

Amar Jambaa
M +61 472 865 948

Rio Tinto plc
6 St James’s Square
London SW1Y 4AD
United Kingdom

T +44 20 7781 2000
Registered in England
No. 719885

Rio Tinto Limited
Level 7, 360 Collins Street
Melbourne 3000
Australia

T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404

riotinto.com

Category: General

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.

Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase, investors find themselves invested in shares that have limited to no upside or even a downside. So, betting on a stock just by looking at the traditional momentum parameters could be risky at times.

It could be safer to invest in bargain stocks that have been witnessing price momentum recently. While the Zacks Momentum Style Score (part of the Zacks Style Scores system), which pays close attention to trends in a stock's price or earnings, is pretty useful in identifying great momentum stocks, our 'Fast-Paced Momentum at a Bargain' screen comes handy in spotting fast-moving stocks that are still attractively priced.

There are several stocks that currently pass through the screen and Cleveland-Cliffs (CLF) is one of them. Here are the key reasons why this stock is a great candidate.

Investors' growing interest in a stock is reflected in its recent price increase. A price change of 11.8% over the past four weeks positions the stock of this mining company well in this regard.

While any stock can see a spike in price for a short period, it takes a real momentum player to deliver positive returns for a longer time frame. CLF meets this criterion too, as the stock gained 18.4% over the past 12 weeks.

Moreover, the momentum for CLF is fast paced, as the stock currently has a beta of 2.27. This indicates that the stock moves 127% higher than the market in either direction.

Given this price performance, it is no surprise that CLF has a Momentum Score of B, which indicates that this is the right time to enter the stock to take advantage of the momentum with the highest probability of success.

In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped CLF earn a Zacks Rank #1 (Strong Buy). Our research shows that the momentum-effect is quite strong among Zacks Rank #1 and #2 stocks. That's because as covering analysts raise their earnings estimates for a stock, more and more investors take an interest in it, helping its price race to keep up. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Most importantly, despite possessing fast-paced momentum features, CLF is trading at a reasonable valuation. In terms of Price-to-Sales ratio, which is considered as one of the best valuation metrics, the stock looks quite cheap now. CLF is currently trading at 0.96 times its sales. In other words, investors need to pay only 96 cents for each dollar of sales.

So, CLF appears to have plenty of room to run, and that too at a fast pace.

In addition to CLF, there are several other stocks that currently pass through our 'Fast-Paced Momentum at a Bargain' screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.

This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.

However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.

Click here to sign up for a free trial to the Research Wizard today.

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ClevelandCliffs Inc. (CLF) : Free Stock Analysis Report
 
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(Bloomberg) — A tightening global copper market is facing the real possibility of simultaneous strike disruptions at three mines in Chile, the top producer.

By far the most serious threat to global supplies comes from Escondida, the biggest copper mine in the world, where workers rejected owner BHP Group’s final wage offer in voting last week. Unless the two sides can reach a deal in government-mediated talks this week, the market may be left without production from a project that last year churned out 1.2 million metric tons.

Two other smaller mines — Codelco’s Andina and JX Nippon Mining & Metals’ Caserones — are at the same stage in their collective bargaining. That puts upwards of 7% of world production at risk in a particularly sensitive moment in the metal cycle and in Chilean politics.

Labor tensions are intensifying just as trillions of dollars in government stimulus fuel demand for industrial metals. Copper futures have gained over the past two weeks after retreating from an all-time high in May. On Monday, prices advanced as much as 0.8% on the London Metal Exchange before closing down 0.3% at $9,700.50 a ton after data showed U.S. manufacturing growth eased in July.

The windfall enjoyed by producers is emboldening mine workers, with host nations also looking at ratcheting up taxes to help resolve inequalities exacerbated by the pandemic. In Chile, that’s all playing out as the nation drafts a new constitution that may lead to tougher rules on water, glaciers, mineral and community rights, with presidential elections in November.

At the same time, companies are striving to keep labor costs in check in a cyclical business and as ore quality deteriorates and input prices start to rise.

In last week’s vote, members rejected BHP’s proposal by an overwhelming 99.5%. Union leaders say the company is dangling large one-time bonuses in exchange for longer hours and new demands in a bid to boost productivity and profit. BHP said its proposal included better conditions and new benefits and that it remains open to dialog.

“We hope that this strong vote will be the decisive wake-up call for BHP to initiate substantive discussions to reach satisfactory agreements, if it wants to avoid a lengthy conflict that could be the costliest in the country’s union history,” the union said.

(Updates prices in fourth paragraph)

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Rio Tinto (RIO) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate — the consensus measure of EPS estimates from the sell-side analysts covering the stock — for the current and following years.

Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.

Therefore, the Zacks rating upgrade for Rio Tinto basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock Prices

The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

For Rio Tinto, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.

Harnessing the Power of Earnings Estimate Revisions

As empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>>.

Earnings Estimate Revisions for Rio Tinto

For the fiscal year ending December 2021, this miner is expected to earn $16.24 per share, which is a change of 110.9% from the year-ago reported number.

Analysts have been steadily raising their estimates for Rio Tinto. Over the past three months, the Zacks Consensus Estimate for the company has increased 20%.

Bottom Line

Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a 'Strong Buy' rating and the next 15% get a 'Buy' rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Rio Tinto to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

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Rio Tinto PLC (RIO) : Free Stock Analysis Report
 
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

So if you're like me, you might be more interested in profitable, growing companies, like Lundin Mining (TSE:LUN). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

View our latest analysis for Lundin Mining

How Quickly Is Lundin Mining Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Lundin Mining has grown EPS by 13% per year. That's a pretty good rate, if the company can sustain it.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. The good news is that Lundin Mining is growing revenues, and EBIT margins improved by 19.9 percentage points to 34%, over the last year. Ticking those two boxes is a good sign of growth, in my book.

In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.

Fortunately, we've got access to analyst forecasts of Lundin Mining's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Lundin Mining Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a CA$8.4b company like Lundin Mining. But we do take comfort from the fact that they are investors in the company. To be specific, they have US$42m worth of shares. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.5% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Is Lundin Mining Worth Keeping An Eye On?

As I already mentioned, Lundin Mining is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. You still need to take note of risks, for example – Lundin Mining has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Investors focused on the Basic Materials space have likely heard of United States Steel (X), but is the stock performing well in comparison to the rest of its sector peers? Let's take a closer look at the stock's year-to-date performance to find out.

United States Steel is a member of our Basic Materials group, which includes 251 different companies and currently sits at #7 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. X is currently sporting a Zacks Rank of #1 (Strong Buy).

The Zacks Consensus Estimate for X's full-year earnings has moved 111.73% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Based on the latest available data, X has gained about 57.90% so far this year. Meanwhile, stocks in the Basic Materials group have gained about 20.52% on average. This means that United States Steel is performing better than its sector in terms of year-to-date returns.

Breaking things down more, X is a member of the Steel – Producers industry, which includes 24 individual companies and currently sits at #14 in the Zacks Industry Rank. On average, this group has gained an average of 56.10% so far this year, meaning that X is performing better in terms of year-to-date returns.

Going forward, investors interested in Basic Materials stocks should continue to pay close attention to X as it looks to continue its solid performance.

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(Bloomberg) — The record-breaking rally in steel has further to run as producers vow not to get burned again by ramping up too fast.

Prices for benchmark hot-rolled coil futures in the U.S. have surged more than 80% this year, touching an all-time high last week as reopening economies fuel consumption. Despite customer pleas for more metal, steelmakers that paid steep costs to shut down furnaces during the pandemic have yet to announce additional plans to build out capacity, focusing instead on generating record profits for shareholders.

The stance will keep supply tight at a time when demand is soaring and China, the world’s largest producer, is signaling measures to limit its output. Makers of everything from washing machines to wind turbines to toasters are already struggling with raw-materials shortfalls and bottlenecks that have fueled inflation concerns, and the reluctance among steelmakers suggests price relief may be unlikely any time soon.

“The finance departments have a voice they didn’t used to have, so the industry is more driven for profit than it is for production now,” said Michelle Applebaum, an independent steel consultant who has covered the industry for 40 years. “It’s a real culture change.”

U.S. steel consumption is on pace to be about 104 million tons this year, and about 108 million tons in 2022, according to Bloomberg Intelligence analyst Andrew Cosgrove. With domestic steelmakers only producing about 87 million this year and 91 million next year, and planned capacity coming online by the end of next year to be about 4.6 million tons per annum, customers will continue to compete for available metal.

To make matters more difficult, soaring demand across the rest of the globe from China to Europe means U.S. buyers will be battling for imports too. Meanwhile, U.S. tariffs remain on shipments from abroad, hurting affordability.

Cleveland-Cliffs Inc. Chief Executive Officer Lourenco Goncalves told investors last quarter that he wasn’t going to produce more tons because it will eventually lead to oversupply and cause prices to deteriorate.

“It’s value, it’s not volume,” he said.

To be sure, not everyone sees the metal rallying through the rest of the year. Automotive demand isn’t going to be as big as initially projected, as semiconductor snags have forced the industry to build inventories as they wait to be able to make the vehicles, and the market has basically recovered to pre-pandemic demand levels, according to Keybanc Capital Markets analyst Phil Gibbs.

“The supply-demand imbalance is now marching toward equilibrium: this is the last fever pitch of the tightness,” Gibbs said. “Our view on actual demand is that we believe you’re in a modest oversupply situation. The only reason we’re not seeing it in the price is that mills have reasonably long backlogs they’re working through.”

U.S. steelmakers told investors on second-quarter conference calls that backlogs are at historic highs, and that with demand expected to remain high through 2021, they’ll book record profits again in the third quarter. That outlook is further underpinning the outlook for a further rally in steel.

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HudBay Minerals (HBM) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2021. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 9. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This mining company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +160%.

Revenues are expected to be $392.1 million, up 87.7% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 12.46% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for HudBay Minerals?

For HudBay Minerals, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.17%.

On the other hand, the stock currently carries a Zacks Rank of #4.

So, this combination makes it difficult to conclusively predict that HudBay Minerals will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that HudBay Minerals would post earnings of $0.04 per share when it actually produced a loss of $0.06, delivering a surprise of -250%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

HudBay Minerals doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

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(Bloomberg) — Workers at the world’s biggest copper mine voted to strike, overwhelmingly rejecting owner BHP Group’s final wage offer, in a move that will stoke concerns over global supplies of the metal.

In voting this week, 99.5% of 2,175 members of the main union at Escondida choose to pressure BHP into offering better terms in a new three-year contract, the union said in a statement late Saturday. Labor rules in Chile give either side the option to utilize at least five days of government mediation before a strike can begin. BHP confirmed it will request mediation in a bid to reach a deal.

The potential for a disruption at a mine that last year churned out 1.2 million metric tons is rippling through the copper market at a time of strong demand and high prices. Futures are up about 5% in the past two weeks. The same union pressing Escondida now for a bigger share of the copper windfall roiled the market in 2017 with a 44-day stoppage.

“We hope that this strong vote will be the decisive wake-up call forBHP to initiate substantive discussions to reach satisfactory agreements, if it wants to avoid a lengthy conflict that could be the costliest in the country’s union history,” the Escondida Union No. 1 said.

Chile, which accounts for more than a quarter of global copper supply, is navigating a slew of wage negotiations that threaten supply just as trillions of dollars in government stimulus fuel demand for industrial metals.

Mine workers are emboldened by record producer earnings, with host nations including Chile looking at ratcheting up taxes to help resolve economic inequalities exacerbated by the pandemic. Mining companies are striving to keep their labor costs in check in a cyclical business and as ore quality deteriorates and prices of inputs start to rise.

Escondida union leaders accuse the company of dangling large one-time bonuses in exchange for longer hours and new demands in a bid to boost productivity and profit. BHP said its proposal included better conditions and new benefits and that it remains open to dialog.

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APN Convenience Retail REIT's (ASX:AQR) stock is up by 4.0% over the past three months. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Specifically, we decided to study APN Convenience Retail REIT's ROE in this article.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital.

View our latest analysis for APN Convenience Retail REIT

How Do You Calculate Return On Equity?

Return on equity can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for APN Convenience Retail REIT is:

12% = AU$47m ÷ AU$408m (Based on the trailing twelve months to December 2020).

The 'return' refers to a company's earnings over the last year. So, this means that for every A$1 of its shareholder's investments, the company generates a profit of A$0.12.

Why Is ROE Important For Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

A Side By Side comparison of APN Convenience Retail REIT's Earnings Growth And 12% ROE

At first glance, APN Convenience Retail REIT seems to have a decent ROE. Especially when compared to the industry average of 6.5% the company's ROE looks pretty impressive. This probably laid the ground for APN Convenience Retail REIT's significant 54% net income growth seen over the past five years. We reckon that there could also be other factors at play here. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.

We then compared APN Convenience Retail REIT's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 4.5% in the same period.

Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Has the market priced in the future outlook for AQR? You can find out in our latest intrinsic value infographic research report.

Is APN Convenience Retail REIT Making Efficient Use Of Its Profits?

APN Convenience Retail REIT has a very high three-year median payout ratio of 94%. This means that it has only 6.1% of its income left to reinvest into its business. However, it's not unusual to see a REIT with such a high payout ratio mainly due to statutory requirements. Despite this, the company's earnings have grown significantly as we saw above.

Additionally, APN Convenience Retail REIT has paid dividends over a period of four years which means that the company is pretty serious about sharing its profits with shareholders. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 99%. However, APN Convenience Retail REIT's future ROE is expected to decline to 6.2% despite there being not much change anticipated in the company's payout ratio.

Conclusion

On the whole, we feel that APN Convenience Retail REIT's performance has been quite good. In particular, its high ROE is quite noteworthy and also the probable explanation behind its considerable earnings growth. Yet, the company is retaining a small portion of its profits. Which means that the company has been able to grow its earnings in spite of it, so that's not too bad. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

(Bloomberg) — Just over five years ago Anglo American Plc was in deep trouble. The natural resources giant, beset by a collapse in commodity prices, scrapped its dividend and announced plans to close mines and cut thousands of workers. Amid talk of an emergency capital raise, its market value fell to less than $3 billion.

This week, the trials of 2016 probably seemed like a parallel universe to its Chief Executive Officer Mark Cutifani. Fueled by a rally in iron ore and other commodity prices, he announced record first-half earnings and billions in dividends. Anyone who took a punt on Anglo’s shares when they reached their nadir, would have seen a 14-fold increase as the market capititalization soared to $55 billion.

“High commodity prices have been very important to us,” Cutifani told investors earlier this week. “We don’t think this is as good as it gets.”

Anglo American is one of many: with raw materials prices surging, the whole natural resources sector is showering shareholders with special dividends and buybacks as miners, oil drillers, trading houses, steelmakers and farmers reap billions in windfall profits. The sector, marked down by investors because of its contribution to climate change and a reputation of squandering money on mega-projects, is again a great cash-machine.

The economic rebound from last year’s Covid slump has powered an explosive rally in commodity prices as consumers forgo vacations and dining out and spend their money loading up on physical goods instead: everything from patio heaters to start-of-the art TVs. Politicians are helping, too, lavishing hundreds of billions on resource-heavy infrastructure projects.

The Bloomberg Commodity Spot Index, a basket of nearly two dozen raw materials, surged to a 10-year high this week and is rapidly closing in on the record set in 2011. Brent crude, the global oil benchmark, has again surged above $75 a barrel, copper is headed back toward $10,000 a ton, European natural gas is at its highest ever for the summer season, and steel is changing hands at unprecedented levels. Agricultural commodities such as corn, soybeans and wheat are also expensive.

“Demand continues to improve with increasing global vaccinations,” Joe Gorder, the chief executive of Valero Energy Corp., one of the world’s largest oil refiners, said earlier this week.

Even commodities long left for dead, like thermal coal, are enjoying a new life in 2021. Coal, burned in power stations to produce electricity, together with huge volumes of carbon emissions, is trading at a 10-year high.

While commodities prices are the main reason behind the turnaround, there are structural factors at play as well. Miners and oil companies have cut spending in new projects savagely, creating a supply shortfall. The miners were first, as they curbed investment from 2015-16 as investors demanded more discipline; oil companies followed up last year and some major energy companies this week announced further cuts in spending for 2021. The result is that while demand is surging, supply isn’t — at least for now. The oil majors are benefiting too from the work of the OPEC+ alliance of oil producers, which is still holding back a large share of output.

Anglo American, which announced $4 billion in dividends, is probably the most remarkable turnaround story in the natural resources sector, but its profits were still dwarfed by its bigger rivals. Rio Tinto Group and Vale SA, the world’s two leading iron ore miners, together vowed to hand back more than $17 billion in dividends last week. There’s still more to come for investors, with both BHP Group, the world’s biggest miner, and Glencore Plc, another big miner and commodity trader, yet to report.

And for once, the world’s biggest steelmakers were not only able to absorb the costs, but pass them on. An industry that has spent much of the last decade in crisis is now also able to reward long suffering shareholders. The world’s largest steel maker outside China, ArcelorMittal SA, that was forced to sell shares and scrap its dividend just five years ago, posted its best results since 2008 this week and announced a $2.2 billion share buyback program.

The miners have stolen the spotlight from the energy industry, traditionally the biggest dividend payer in the natural resources industry.

Still, Big Oil recovered from the historic price collapse of 2020, when a vicious Saudi-Russian price war and the Covid-19 pandemic briefly sent the value of West Texas Intermediate, the U.S. oil benchmark, below zero. Supported by rising oil, natural gas, and, above all, the chemicals that go into plastics, Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell Plc, and TotalEnergies SE delivered profits that went to pre-covid levels. BP Plc, the smallest of the top five oil majors, will report results next week.

With cash flow surging, Shell, which last year cut its dividend for the first time since the Second World War, was able to hike it nearly 40%, and announced an additional $2 billion in buybacks.“We wanted to signal to the market the confidence that we have in cash flows,” Shell CEO Ben van Beurden said. Chevron and Total also announced they will buy shares. Exxon, though, is still licking its wounds and focused on paying down debt.

The more opaque world of commodity trading has also cashed in. Glencore said this week that it was expecting bigger trading profits than forecast, with rivals Vitol Group and Trafigura Group, two of the world’s largest oil traders, also benefiting from lucrative opportunities created by rocketing prices.

The agricultural traders have cashed on higher prices and unusually strong demand from China. Bunge Ltd., a trader that’s the world’s largest crusher of soybeans, told investors it expected to deliver its best earnings-per-share since its initial public offer two decades ago. Archer-Daniels-Midland Co., another big American grain trader and processor, also flagged strong earnings. And Cargill Inc., the world’s largest agricultural trader, is heading toward record earnings in its 2021 fiscal year.

Whether the natural resources boom can last is hotly contested. Many investors worry climate change makes the long-term future of the industry hard to read and they also fret about the tendency of executives to approve expensive projects at the peak of the cycle. Mining executives fear Chinese demand will slow down at some point, hitting iron ore in particular. But the current lack of investments may support other commodities, like copper and oil.

But Shell’s Van Beurden summed up the bullish case earlier this week: “Supply is going to be constrained and demand is actually quite strong”.

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United States Steel Corporation (NYSE:X) just released its second-quarter report and things are looking bullish. United States Steel delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$5.0b, some 10% above indicated. Statutory EPS were US$3.53, an impressive 24% ahead of forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for United States Steel

After the latest results, the ten analysts covering United States Steel are now predicting revenues of US$18.0b in 2021. If met, this would reflect a substantial 32% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 169% to US$10.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$18.2b and earnings per share (EPS) of US$10.39 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 11% to US$32.71. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on United States Steel, with the most bullish analyst valuing it at US$41.00 and the most bearish at US$21.40 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that United States Steel's rate of growth is expected to accelerate meaningfully, with the forecast 75% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.08% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that United States Steel is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on United States Steel. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for United States Steel going out to 2023, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 4 warning signs for United States Steel (2 are a bit concerning!) that you need to be mindful of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Image source: The Motley Fool. Turquoise Hill Resources Ltd (NYSE: TRQ)Q2 2021 Earnings CallJul 30, 2021, 8:00 a.m. ETContents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: OperatorGood morning, ladies and gentlemen, and welcome to Turquoise Hill Second Quarter Financial Results Conference Call.

Investors with an interest in Mining – Miscellaneous stocks have likely encountered both Billiton (BBL) and Wheaton Precious Metals Corp. (WPM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Billiton is sporting a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BBL currently has a forward P/E ratio of 6.98, while WPM has a forward P/E of 30.25. We also note that BBL has a PEG ratio of 1.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WPM currently has a PEG ratio of 6.05.

Another notable valuation metric for BBL is its P/B ratio of 1.32. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WPM has a P/B of 3.56.

These are just a few of the metrics contributing to BBL's Value grade of A and WPM's Value grade of D.

BBL stands above WPM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BBL is the superior value option right now.

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Here are four stocks with buy rank and strong income characteristics for investors to consider today, July 30th:

BHP Group BHP: This resources company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 10% over the last 60 days.

BHP Group Price and Consensus

BHP Group price-consensus-chart | BHP Group Quote

This Zacks Rank #1 (Strong Buy) company has a dividend yield of 5.03%, compared with the industry average of 0.00%. Its five-year average dividend yield is 4.36%.

BHP Group Dividend Yield (TTM)

BHP Group dividend-yield-ttm | BHP Group Quote

Fanhua Inc. FANH: This provider of financial services has witnessed the Zacks Consensus Estimate for its current year earnings increasing 1% over the last 60 days.

Fanhua Inc. Price and Consensus

Fanhua Inc. price-consensus-chart | Fanhua Inc. Quote

This Zacks Rank #1 company has a dividend yield of 4.21%, compared with the industry average of 0.78%. Its five-year average dividend yield is 3.40%.

Fanhua Inc. Dividend Yield (TTM)

Fanhua Inc. dividend-yield-ttm | Fanhua Inc. Quote

Cathay General Bancorp CATY: This holding company for Cathay Bank has witnessed the Zacks Consensus Estimate for its current year earnings increasing 10.2% over the last 60 days.

Cathay General Bancorp Price and Consensus

Cathay General Bancorp price-consensus-chart | Cathay General Bancorp Quote

This Zacks Rank #1 company has a dividend yield of 3.25%, compared with the industry average of 1.80%. Its five-year average dividend yield is 3.13%.

Cathay General Bancorp Dividend Yield (TTM)

Cathay General Bancorp dividend-yield-ttm | Cathay General Bancorp Quote

City Holding Company CHCO: This holding company for City National Bank of West Virginia has witnessed the Zacks Consensus Estimate for its current year earnings increasing 8.4% over the last 60 days.

City Holding Company Price and Consensus

City Holding Company price-consensus-chart | City Holding Company Quote

This Zacks Rank #1 company has a dividend yield of 3.05%, compared with the industry average of 1.93%. Its five-year average dividend yield is 2.93%.

City Holding Company Dividend Yield (TTM)

City Holding Company dividend-yield-ttm | City Holding Company Quote

See the full list of top ranked stocks here.

Find more top income stocks with some of our great premium screens.

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Cathay General Bancorp (CATY) : Free Stock Analysis Report

City Holding Company (CHCO) : Free Stock Analysis Report

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VANCOUVER, British Columbia, July 30, 2021 (GLOBE NEWSWIRE) — Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) today announced a $500,000 donation to UNICEF Canada in support of the COVID-19 Vaccine Global Access Facility (COVAX) to support equitable access to COVID-19 vaccination worldwide. This donation is in addition to a previous $1 million contribution made by Teck to UNICEF Canada for the COVAX program in March 2021.

“Working together to vaccinate the world is one of the most effective ways to help children, their families and their communities move beyond the pandemic and protect us all from future variants," said David Morley, President and CEO of UNICEF Canada. "Teck’s unwavering support and generous donation will help us deliver COVID-19 vaccines to frontline workers and vulnerable populations around the globe, including in some of the world’s hardest-to-reach places."

“Teck is proud to again support UNICEF and the Government of Canada in the global effort to defeat COVID-19,” said Don Lindsay, President and CEO, Teck. “Providing broad access to COVID-19 vaccines is key to ensuring the health and safety of our local and global communities and this contribution will help UNICEF’s vaccination efforts in countries most in need.”

Teck is making this new contribution in recognition and thanks for the COVID-19 rapid tests provided for Teck’s worksites through a Government of Canada initiative making tests available to businesses and organizations for workplace screening. The program is helping to support the health and wellbeing of Teck employees and communities.

Teck’s contribution to UNICEF will help support vaccination efforts in countries most in need and will support equitable access to COVID-19 vaccines. The contribution will ensure that over 100,000 health care workers in the most difficult to reach communities receive vaccination from COVID-19 and will establish permanent infrastructure to serve future women and children’s needs.

COVAX is a global collaboration co-led by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO, and includes UNICEF, which leads on procurement and delivery, as well as getting countries ready to receive vaccines. It is currently targeting 190 countries having access to 2 billion COVID-19 vaccine doses available for delivery by the end of 2021. For more information on COVAX, please visit UNICEF Canada’s website.

This donation is part of Teck’s $20 million COVID-19 Response Fund, supporting critical social initiatives and increased healthcare capacity in the communities in which Teck operates and globally. Through the fund, Teck also made an additional $1 million available to advance the use of copper products to support infection control and prevention through its Copper & Health program, and has supported numerous health and social service organizations. Teck also donated $500,000 to support COVID-19 response in India. For more information on Teck’s response to COVID-19, visit teck.com/updates.

About Teck
As one of Canada’s leading mining companies, Teck is committed to responsible mining and mineral development with major business units focused on copper, zinc, and steelmaking coal, as well as investments in energy assets. Copper, zinc and high-quality steelmaking coal are required for the transition to a low-carbon world. Headquartered in Vancouver, Canada, Teck’s shares are listed on the Toronto Stock Exchange under the symbols TECK.A and TECK.B and the New York Stock Exchange under the symbol TECK. Learn more about Teck at www.teck.com or follow @TeckResources.

About UNICEF
UNICEF is the world’s leading humanitarian organization focused on children. We work in the most challenging areas to provide protection, healthcare and immunizations, education, safe water and sanitation and nutrition. As part of the United Nations, our unrivaled reach spans more than 190 countries and territories, ensuring we are on the ground to help the most disadvantaged children. While part of the UN system, UNICEF relies entirely on voluntary donations to finance our life-saving work. Please visit unicef.ca and follow us on Twitter, Facebook and Instagram.

Teck Media Contact:
Chris Stannell
Public Relations Manager
604.699.4368
chris.stannell@teck.com

Teck Investor Contact:
Fraser Phillips
Senior Vice President, Investor Relations & Strategic Analysis
604.699.4621
fraser.phillips@teck.com

UNICEF Canada Media Contact:
Marie-Claude Rouillard
Communications Manager
514.232.4510
MRouillard@unicef.ca

July 30 (Reuters) – BHP Group Ltd said on Friday it would build two solar farms and a battery storage system in partnership with Canada's TransAlta Renewables Inc at its nickel project site in Western Australia.

The global miner said the project will help reduce carbon emissions by 12% compared with 2020 levels at its Mt Keith and Leinster operations, where power is currently being generated through diesel and gas turbines.

The proposed solar farms will also help produce sustainable low-carbon nickel used in electric-vehicle batteries, BHP said, for which the company signed a supply agreement with Tesla Inc last week.

The project will contribute to the miner's medium-term target to reduce scope 1 and 2 emissions from its assets by at least 30% from 2020 levels by 2030, it said. (https://bit.ly/3rFGxHk)

BHP said the construction of the farms is scheduled to begin in the second quarter of 2022 and would take 12 to 14 months for completion. (Reporting by Savyata Mishra in Bengaluru; Editing by Ramakrishnan M.)

VANCOUVER, British Columbia, July 30, 2021–(BUSINESS WIRE)–Fancamp Exploration Ltd. ("Fancamp" or the "Corporation") (TSX Venture Exchange: FNC) provides the following corporate update. On July 15 and 16, 2021, the Supreme Court (British Columbia) heard Mr. Peter Smith’s application for an order that the annual general meeting ("AGM") of the Company be held on July 26, 2021, and for other relief. The judge dismissed the application for an order that the AGM be held on July 26, 2021, and reserved judgment on all other issues for two weeks. The Company was granted an extension by the BC Registry of Companies of the time within which to hold its AGM until December 30, 2021.

About Fancamp Exploration Ltd. (TSX-V: FNC)
Fancamp is a growing Canadian mineral exploration corporation dedicated to its value-added strategy of advancing mineral properties through exploration and development. The Corporation owns numerous mineral resource properties in Quebec, Ontario and New Brunswick, including gold, rare earth metals, strategic and base metals, zinc, chromium, titanium and more. Fancamp is also building on the industrial possibilities inherent in dealing with some of these materials, notable being the development of its Titanium technology strategy. It has recently announced the acquisition of ScoZinc, a Canadian exploration and mining corporation that has full ownership of the Scotia Mine and related facilities near Halifax, Nova Scotia, as well as several prospective exploration licenses in surrounding regions. The Corporation is managed by a new and focused leadership team with decades of mining, exploration and complementary technology experience.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210730005548/en/

Contacts

Rajesh Sharma, Chief Executive Officer
+1 (604) 434 8829
info@fancamp.ca

Debra Chapman, Chief Financial Officer
+1 (604) 434 8829
info@fancamp.ca

Media Contact
Hyunjoo Kim
Director, Communication, Marketing & Digital Strategy
Kingsdale Advisors
Phone: 416-867-2357
Cell: 416-899-6463
Email: hkim@kingsdaleadvisors.com

Oil prices climbed this week as U.S. inventories tightened and the risk of Iran reaching a new deal and bringing extra crude online decreased.

Friday, July 30th, 2021

Crude prices drew hefty support this week from U.S. inventory dynamics, with commercial stocks falling to their lowest since January 2020 and indications that the tightening is set to continue. Concurrently, the markets have seemingly got accustomed to the idea that there will not be any Iranian cliff-hanger as President-elect Raisi is to be sworn into office next week, mitigating erstwhile concerns that Tehran might flood the market with incremental barrels. COVID headwinds persist, however, as several European countries see rising Delta variant cases.

EU Fails to Replenish Gas Storage. European countries are struggling to replenish their gas reserves amid exorbitantly high LNG prices and limited availability of pipeline supplies, with total EU gas reserves standing at a mere 616 TWh, equivalent to some 63 billion cubic meters, the lowest level since 2015. 

TotalEnergies Buys into Singapore EV Charging. Teaming up with another French firm Bolloré, TotalEnergies (NYSE:TTE) agreed to buy Singapore’s leading electric vehicle charging network (accounting for 85% of the city-state’s charge points), acquiring Blue Charge for an undisclosed sum. TotalEnergies seeks to increase its charge point tally tenfold to 150,000 by 2025. 

Gasoline market backwardation. Whilst gasoline cracks remain the best-performing segment of most European refiners’ slate, the derivatives market indicates that the global gasoline balance is tightening as the Eurobob oxy M1-M2 swap surged past the $20 per metric ton earlier this week, the widest in almost two weeks. 

Related: Oil Tops $75 On Shrinking U.S. Crude Inventories

London court to reopen $7 billion BHP dam lawsuit. The London Court of Appeal reopened a lawsuit against the Anglo-Australian mining firm BHP (NYSE:BHP) over the 2015 Mariana dam disaster, Brazil’s worst-ever environmental disaster, allowing a 200 000-strong claimant group to appeal against a lower court decision. 

ADNOC to Ease October 2021 production cuts. The UAE state oil company ADNOC informed its term buyers that it would ease its export nomination cuts for October 2021, bringing back 10 percentage points worth of output compared to September, a clear indication that the Emirates remains earnest in its production ramp-up drive.

European Majors Leave Venezuela. France’s TotalEnergies (NYSE:TTE) and Norway’s Equinor (NYSE:EQNR) have quit their Petrocedeño joint venture, transferring their stakes to a subsidiary of PDVSA. The JV manages the Juni oil field in the Orinoco Belt and a 180kbpd heavy crude upgrader – this was used by both companies, arguing that developing the heavy barrels is incompatible with their low-carbon strategies. 

UK Seeks to Remove China from Nuclear Projects. UK media report that China’s national nuclear firm CGN might be blocked from building new infrastructure on the British Islands, triggered by concerns that increased Chinese participation in Britain’s energy infrastructure could be detrimental to the nation’s overall energy security.  

Rio Tinto Starts $2.4 Billion Serbia Lithium Project. Rio Tinto (NYSE:RIO) brought forward a much-anticipated investment decision on the project, stating that it would already launch construction next year with a commissioning aim of 2026-2027. Jadar in Serbia is bound to become Europe’s largest lithium supply source. 

Biden Administration to Revise Toxic Coal Wastewater Rule. The White House will revise a Trump-era rule that allowed US coal-fired plants to delay installing equipment that could prevent lead, selenium, or other pollutants seeping into rivers and streams, Reuters reports. The US government intends to finalize the new set of rules by 2024.

Shell Buys Inspire Energy as it Seeks to Gain Green Credentials. Shell (NYSE:RDS) purchased the US-based renewable energy retailer Inspire Energy, Reuters reports, amidst increasing domestic pressure to speed up its decarbonization efforts.

Spanish High Court Clears Repsol CEO. Antonio Brufau, the CEO of Spanish oil firm Repsol (BME:REP) was cleared of allegations that he had spied on market competitors to block a takeover bid by PEMEX and its partner. The court found no evidence of the chairman’s direct involvement in the spying case, triggering a more than 2% hike in Repsol stocks. 

Wheat Rises on Inclement Weather. Wheat futures at the Chicago BOT rose to a 2-month high as droughts in the US Midwest and freezing temperatures in Brazil have sapped global spring wheat yields. The Wv1 CBOT contract surpassed the $7 per bushel threshold, whilst the Paris December contract rose beyond €220 per ton (equivalent to $7.1 per bushel).

Indonesia Sets 2060 Net Zero Objective. Indonesia announced it would seek to achieve net carbon neutrality by 2060 or sooner, seeing its aggregate greenhouse gas emissions peak in 2030. Interestingly, it is oil that will be phased out the swiftest in the upcoming future, with abundant coal retaining its importance in power generation well into mid-century. 

NOVATEK Revisits Obsky LNG. The Russian LNG-focused producer abandoned its 5mtpa Obsky LNG project and revamped it instead into a gas petrochemicals complex that would produce ammonia and hydrogen from natural gas. NOVATEK initially intended to use its proprietary Arctic Cascade liquefaction technology for the project. 

Offshore Suriname Production Gets Real. Two appraisal drilling programs carried out by operator TotalEnergies (NYSE:TTE) in Suriname’s Block 58 confirmed net black oil pays in both the Sapakara and Kwaskwasi prospects, marking another important step towards oil commercialization. This year will still see another appraisal well at the Bonboni field and a flow test of Sapakara.

By Tom Kool for Oilprice.com

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• Shell Reports $5.5 Billion Net Profit And Hikes Dividends
  

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Vale S.A. VALE reported second-quarter 2021 adjusted earnings per share of $1.59, which surpassed the Zacks Consensus Estimate of $1.48. The bottom line improved massively from 22 cents reported in the prior-year quarter. This can primarily be attributed to strong performance of the Ferrous Minerals business, aided by higher volumes and iron ore prices.

Revenues

Net operating revenues improved 122% year over year to around $16.7 billion but missed the Zacks Consensus Estimate of $16.8 billion. Net operating revenues from Ferrous Minerals soared 143% year over year to $14.3 billion. Base Metals’ net operating revenues climbed 54% to $2.2 billion. The Coal segment’s revenues surged 71% year on year to $161 million.

Iron ore prices were on an uptrend through the reported quarter and breached $200 per ton mark aided by a constrained iron ore supply and strong demand in China. Coal prices were higher owing to tightening supply of spot cargoes from Australia. Nickel and copper prices were also higher compared to the prior-year quarter. While sales volumes for iron ore, nickel and metallurgical coal were higher than year-ago levels, volumes for thermal coal and copper declined.

VALE S.A. Price, Consensus and EPS Surprise

VALE S.A. price-consensus-eps-surprise-chart | VALE S.A. Quote

Operating Performance

In second-quarter 2021, cost of goods sold totaled $5.8 bllion, up 38% year over year. Gross profit soared 229% year over year to $10.9 billion. Gross margin was 65.2%, up from 44% in the prior-year quarter.

Selling, general and administrative expenditure rose 7% year over year to $133 million. Research and evaluation expenses increased 57% to $141 million compared with year-ago quarter.

Adjusted operating income was $10.2 billion in the reported quarter, reflecting an impressive upsurge of 297% from the prior-year quarter. Adjusted EBITDA was $11 billion in the reported quarter compared with $3.4 billion in the prior-year quarter.

Pro-forma adjusted EBITDA (excluding expenses related to Brumadinho and COVID-19) advanced 213% year over year to $11.2 billion. It marked a record for the second quarter, driven by higher iron ore and pellets realized prices and sales volumes. This was partially offset by certain costs and expenses that are linked to the iron ore price, such as purchases from third-parties and royalties, elevated freight costs and higher maintenance and services costs.

Ferrous Minerals’ EBITDA soared 205% year over year to $10.7 billion on higher iron prices. Base Metals EBITDA improved 42% to $866 million from the last-year quarter. Coal EBITDA was a negative $164 million compared with a negative $269 million in second-quarter 2020.

Balance Sheet & Cash Flow

Vale exited the second quarter of 2021 with cash and cash equivalents of $13.6 billion compared with $12 billion at the end of the last-year quarter. Gross debt at the quarter-end was $12.1 billion compared with $16.9 billion at the end of the last-year quarter. In the reported quarter, net cash generated from operating activities totaled $7.7 billion compared with $1.3 billion in the prior-year quarter.

Trims 2021 Production Capacity Guidance

Vale trimmed its guidance for year-end iron ore production capacity to 343 million tons (MT) per annum from the earlier stated target of 350 Mt. The company cited licensing issues at its Sistema Norte and Mutuca assets in Brazil, as well as temporary restrictions on the disposal of mining waste at its Itabira mine for the guidance cut. Executives also warned about an ongoing strike at its operations in Sudbury, Canada, that might impact third-quarter production. Despite the setbacks, the company remains confident regarding reaching its annual production guidance of 315-335 MT of iron ore set for 2021.

Outlook

Per the company, even though iron ore volumes are likely to pick up in the second half of the year, production cuts due to environmental restrictions in China are likely to weigh on demand. However, apart from China, the steel sector has been improving at a rapid pace with all major markets resuming pre-pandemic levels. This will continue to support iron ore demand. The resurgence of COVID-19 cases due to the Delta variant remains a concern.

Improvement in global steel production should benefit seaborne coking coal demand. Supply from Australia should improve by the end of the ongoing quarter as some suspended mines resume production and maintenance programs are completed. It remains uncertain as to how long Australian coal will be restricted in China and remains the key factor that will impact prices. Prices for thermal coal market will be supported in the third quarter by demand and supply imbalance. Forecast of a hotter-than-normal summer in North East Asia, recovering industrial activity and high gas prices should keep thermal coal demand solid. China may again ease import quota restrictions, which would generally help sustain seaborne prices.

For nickel, the company anticipates a small surplus in 2021. Growth in stainless steel production and a shift toward the electrification of the world economies will continue to support demand for the metal. Copper market is expected to show a deficit this year and prices are expected ride on robust demand and persisting supply issues.

Price Performance

In the past year, shares of Vale have gained 96.5%, compared with the industry’s rally of 91.1%.

Image Source: Zacks Investment Research

Zacks Rank & Other Stocks to Consider

Vale currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other top-ranked stocks in the basic materials space are Nucor Corporation NUE, Cabot Corporation CBT and Dow Inc. DOW. All of these stocks flaunt a Zacks Rank #1.

Nucor has a projected earnings growth rate of around 455.4% for the current year. The company’s shares have soared 147% in a year.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 51% in the past year.

Dow has an expected earnings growth rate of around 403% for the current year. The company’s shares have gained 52% in the past year.

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