First, what are copper stocks, and why do experts believe they will have a positive price trend in the coming year? Copper-related stocks are those issued by companies involved in the copper industry, primarily those that mine and refine the commodity; these include construction, electronics manufacturing, transportation, and others. Experts believe the industry will remain bullish as electrification and electric vehicles gain popularity, increasing the world's appetite for the base metal.
Now, let us go over the top 5 copper-related stocks Malaysia that investors should consider investing in.
5 Copper Stocks Worth to Invest in Malaysia
1. BHP Group
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The BHP Group is the largest mining company in the world, producing copper, gold, iron ore, and energy coal. The company is well-known for its respectable dividend payout as well as its 4-percentage-point long-term earnings growth rate. BHP's most recent dividend payout is $2 per share in June 2021, bringing the company's total returns to shareholders to more than $15 billion for the year.
2. Southern Copper Corporation
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Another company to keep an eye on is Southern Copper Corporation. Southern Copper is a Mexican copper producer that also mines other metals such as molybdenum, zinc, and silver. Beginning in August 2021, this company, which is currently the world's second largest copper producer and holds 13% off the world's copper reserves, with a quarterly cash dividend of 90c per share.
3. Freeport-McMoRan Inc.
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Another company with which to trade copper stocks is Freeport-McMoran Inc. This company is a leading international mining company with significant copper and gold reserves, and it is known as one of the fastest growing copper stocks. Freeport McMoran, based in Indonesia, paid a cash dividend of 0.75c per share on August 2, 2021, in addition to an existing annual base dividend of 30c per share.
4. Kaz Minerals plc
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Kaz Minerals, like the rest of the companies on this list, is primarily engaged in mining and processing copper and other metals, with operations in Kazakhstan. The company's constant focus on implementing modern technology to develop its processes has helped to reduce production costs, ultimately increasing profit and production.
5. Coeur Mining, Inc.
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Last but not least is Coeur Mining, a Chicago-based gold, silver, and zinc producer. The company is known for its emphasis on resource expansion and new discoveries, and it is expected to grow by 127% year on year.
How to Invest in Copper Stocks
So, now that we've gone over the top five copper-related stocks in Malaysia, let's go over how to get started investing in them.
1. Step 1 : Find a Broker
The first possible step for a new investor to take before beginning to invest in copper stocks is to select the right broker to trade with. Once you've decided on a broker, you can open a trading and CDS account with them right away.
2. Decide Types of Trade to Invest
Whether you want to trade CFDs, a single stock, or a copper ETF, make sure it fits your financial ability. You should also invest in copper-related stocks that are appropriate for your trading style and knowledge.
CFDs are leveraged, which means you can open a larger position with a small initial deposit (called margin). However, keep in mind that with leverage, your potential profit or loss is calculated based on the total size of your position and can significantly outweigh your margin amount.
If you want a broader exposure to copper, you should invest in an ETF. This gives you access to a basket of different copper industry company shares that you haven't actively chosen.
3. Open Position and Monitor Trade
Once you've made your decision, it's time to open a position with your chosen broker and closely monitor your trade to ensure risks are well mitigated.
How to Choose the Best Copper Stocks to Invest In Malaysia
1. Find The Best Value Stocks
The best value stocks have the lowest 12-month trailing price-to-earnings (P/E) ratio. A low P/E ratio indicates that you are paying less for each profit generated. As a result, if you want to make more money, it is best to look for copper-related stocks with a low P/E ratio.
2. Consider The Fastest Growing Stocks
The fastest growing stocks are those that are expected to outperform the market in terms of sales and earnings growth. These stocks are usually traded at a high P/E ratio.
3. Keep an Eye on Copper Stocks with the Best Momentum
The best momentum copper related stocks, on the other hand, have the highest total return over a short period of time. In most cases, these stocks can also crash unexpectedly, posing serious risks.
Benefits of Investing in Copper Related Stocks
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Gain Exposure
Ideally, many investors decided to trade in the best copper stocks and ETFs as a way to gain market exposure without owning the commodity. This will allow investors to gain as much experience as possible in the stock market while also controlling the amount of financial loss.
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Stable Demand
Furthermore, copper stocks are in high demand, and the metal is widely used in processes ranging from electricity generation to infrastructure construction. Because copper has so many uses, its price is regarded as a reliable indicator of macroeconomic health.
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Steady Grow of Usage in the Future
Furthermore, once the project's copper reserves are depleted, copper is expected to have a very bright future. Aside from that, there is currently a surge in the production of electric vehicles, which is expected to grow exponentially in the future and drive the copper price even higher.
Invest in Top Copper Stocks Malaysia Today
Those looking to increase their passive income can benefit from stock market investing. Trading, on the other hand, comes at a price. Before you enter the stock market, make sure you have sufficient knowledge. Choosing the right broker can also be beneficial. Finally, before you begin investing, you must ensure that you are only considering the best commodity with the highest return. In this article, we have assisted you in providing a brief reading on copper-related stocks, the metal that has gained a lot of traction and is performing very well this year. We hope it has given you a sense of what's important when it comes to buying and selling stocks.
