5 Best Copper Stocks to Buy Now

3. Vale S.A. (NYSE:VALE)

Number of Hedge Fund Holders: 27

Vale S.A. (NYSE:VALE) is a Brazilian metals and mining company. The company produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt. Furthermore, the company also operates hydroelectricity plants. 

Vale S.A. (NYSE:VALE) has seen some dark periods in the past, yet in the last five years, the company has done a commendable job to produce a stronger financial performance. From 2017 to the end of 2021, the company’s net income compounded by 32.43%, and its free cash flow margin increased to 52.1% from 34.5%. Furthermore, Vale S.A. (NYSE:VALE)’s enterprise value stands at $69.27 billion as of November 3 and has an FCF yield of over 40%.

On September 12, RBC Capital analyst Tyler Broda upgraded Vale S.A. (NYSE:VALE)’s shares from Sector Perform to Outperform and raised his price target to $16 from $15. The analyst anticipates a major catalyst for the company in Q4 2022.

Here is what Grantham Mayo Van Otterloo & Co. LLC had to say about Vale S.A. (NYSE:VALE) in its Q1 2022 investor letter:

“Let’s look at Vale (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”