In this article, we will discuss the 7 Best Natural Resources Stocks to Invest in According to Hedge Funds.
Natural resource stocks are an important part of the global economy, representing mining, energy, and agricultural companies. These industries are the foundation of numerous sectors, providing necessary materials for infrastructure, technology, and transportation. Despite the growing emphasis on renewable energy, fossil fuels, metals, and agricultural resources remain essential for modern economies. According to The Business Research Company, the global mineral market is expected to grow at a compound annual growth rate (CAGR) of 6.2%. This growth emphasizes the long-term importance of natural resources.
The top 40 global mining companies generated a record $943 billion in revenue in 2022, but this figure declined to approximately $792 billion in 2024, owing primarily to fluctuating commodity prices. Despite this, Deloitte reported that between January and mid-November 2024, the oil and gas industry paid out $213 billion in dividends and $136 billion in buybacks, demonstrating the sector’s strong cash returns.
However, the natural resource sector has been experiencing a surge in market activity, driven mainly by commodity price movements and global demand. Precious metals, in particular, have proven to be strong assets. Over the past year, the market’s Gold Index returned 44.59%, while the Silver Index returned 42.01%. These gains have resulted from rising investor interest in safe-haven assets due to inflationary pressures and escalating global trade tensions. As inflation erodes the value of fiat currencies, investors are increasingly turning to gold and silver as safe-haven assets during times of uncertainty.
Moreover, technological advancements such as Floating Liquefied Natural Gas (FLNG) platforms are increasing the efficiency of offshore gas production while reducing reliance on onshore infrastructure. According to Business Wire, global liquefied natural gas (LNG) liquefaction capacity is expected to double by 2028 from 473 million tons per annum (MTPA) in 2023 to 968 MTPA as expansion projects continue. This projected increase indicates that even as the world strives for cleaner energy sources, natural gas will continue to play an important role in the global energy mix.
While efforts to reduce global carbon emissions continue, natural resource companies are adjusting by balancing traditional operations with sustainability initiatives. For example, the UAE has pledged $30 billion to a global finance fund while its banking sector aims to invest $270 billion in green finance by 2030 to support renewable energy growth. Simultaneously, Middle Eastern sovereign wealth funds, which manage $3.8 trillion in assets, are increasingly allocating capital to green investments. This shift has not only reduced fiscal breakeven burdens for energy companies but has also increased regional economic stability.
The chemicals industry is also shifting to sustainability, with renewable production of key chemicals such as ammonia, methanol, and olefins expected to cost between $440 billion and $1 trillion by 2040. According to PwC, this figure could rise to between $1.5 trillion and $3.3 trillion by 2050.
Similarly, innovative zinc recycling techniques have produced a 95% recovery rate from steel mill waste, converting industrial waste into useful recyclable components. Nanotechnology breakthroughs are increasing recovery efficiency in gold mining while reducing environmental impact. These technological advancements demonstrate the growing significance of technology in maximizing resource use and cutting waste, which propels the natural resource industry forward.
With this, let’s now examine the 7 Best Natural Resources Stocks to Invest in According to Hedge Funds, showcasing businesses leading the way in innovation and expansion within this vital sector.
Copyright: areeya / 123RF Stock Photo
Methodology
To compile our list of the 7 Best Natural Resources Stocks to Invest in According to Hedge Funds, we first conducted extensive research to identify companies with significant exposure to the natural resource sector. We defined exposure in terms of mining, energy production, agriculture, or the extraction and processing of key commodities. We then analyzed these companies based on their hedge fund holdings and ranked them based on the number of hedge fund investors who held stakes in these companies, as per the Q4 2024 data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
7. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 62
Occidental Petroleum Corporation (NYSE:OXY) operates a diversified energy portfolio encompassing oil and gas exploration, midstream operations, and chemical manufacturing. With a major presence in North Africa, the Middle East, and the United States, the company is actively increasing its reserves while concentrating on optimizing capital efficiency.
For Q4 ended December 31, 2024, Occidental Petroleum Corporation (NYSE:OXY) reported a net loss of $297 million due to an environmental liability charge of $1.1 billion. The company, however, recorded an adjusted income of $792 million after deducting this penalty, which was bolstered by increased production volumes and increased cost efficiencies. Moreover, operating cash flow reached a healthy $3.6 billion, allowing Occidental to fulfill its debt reduction goal of $4.5 billion. The company announced $1.2 billion in divestitures planned for early 2025, further strengthening its balance sheet.
With a daily production of 1,463 thousand barrels of oil equivalent (Mboed) during the quarter, Occidental Petroleum Corporation (NYSE:OXY)’s performance surpassed expectations by 13 Mboed. Strong output from the Permian Basin and Rockies primarily drove this impressive achievement. The Oil and Gas sector also posted pre-tax profits of $1.2 billion, which benefited from a sharp 215% increase in natural gas prices compared to the prior quarter. The CrownRock acquisition and additional discoveries in the Permian Basin further boosted Occidental’s proven reserves to 4.6 billion barrels of oil equivalent.
Looking ahead, Occidental Petroleum Corporation (NYSE:OXY) is committed to long-term sustainability and capital efficiency. The company’s remarkable 2024 all-in reserve replacement rate of 230% demonstrates its capacity to maintain its resource base in the future. With a persistent focus on production stability, portfolio optimization, and further debt reduction, Occidental is in a strong position to handle upcoming obstacles and seize new growth prospects.
6. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 66
Teck Resources Limited (NYSE:TECK) is a global mining company with operations in North America, Asia, and Europe. The company has established itself as a copper and zinc production leader while also pursuing a strategic shift toward energy transition metals. This shift is part of Teck’s larger strategy to reallocate capital from its steelmaking coal sector to concentrate on metals critical to a clean energy future.
Teck Resources Limited (NYSE:TECK)’s continued success in this transition is demonstrated by its financial performance in the fourth quarter ended December 31, 2024. Favorable base metal prices and record copper production drove the company’s reported adjusted EBITDA of $835 million. Copper sales increased by 24% year-over-year, reaching 124,900 tons, while zinc-in-concentrate sales increased by 24% to 204,000 tons.
With a $385 million profit from continuing operations, Teck’s recovery from a loss in Q4 2023 is especially noteworthy. This recovery was significantly fueled by increased production and improved cost efficiencies. Teck Resources Limited (NYSE:TECK) has been able to provide outstanding returns to its shareholders due to its strong financial performance. In 2024, the company distributed $1.8 billion in dividends and share buybacks.
Moving forward, Teck Resources Limited (NYSE:TECK) anticipates that copper production will continue to increase, with estimates for 2025 ranging from 490,000 to 565,000 tons. However, the company’s zinc division presents difficulties, as zinc-in-concentrate production is expected to drop from 615,900 tons in 2024 to between 525,000 and 575,000 tons in 2025. The Red Dog mine’s deteriorating grades are the main cause of this decline, which will be compounded by the Qanaiyaq pit’s depletion by mid-2025 and impact the annual zinc production. Despite this anticipated drop, Teck is well-positioned to withstand any volatility in base metal prices due to its solid operational performance and ongoing focus on growing its copper portfolio, which further solidifies its position as one of the best natural resource stocks to invest in.
5. Linde Plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 70
Linde Plc (NASDAQ:LIN) is a global leader in the industrial gas industry, serving a variety of sectors in the Americas, Europe, the Middle East, Africa, and Asia-Pacific. The company supplies vital atmospheric and process gases, including helium, hydrogen, nitrogen, and oxygen to industries such as manufacturing, electronics, healthcare, and energy.
Linde Plc (NASDAQ:LIN)’s financial performance for the fiscal year ended December 31, 2024 was strong and stable, with sales of $33.0 billion and a 7% increase in adjusted operating profit. Volumes increased across the Americas and Asia-Pacific segments, owing to higher pricing and successful project launches in electronics and industrial manufacturing. Despite a 5% revenue decline in its Engineering division, the company’s third-party equipment backlog remained solid at $3.3 billion. Linde also continued to provide significant returns to shareholders, with $7.1 billion distributed through dividends and buybacks.
Moreover, Linde Plc (NASDAQ:LIN) has significantly expanded its portfolio as part of its commitment to clean energy. The company signed a long-term hydrogen supply agreement with ExxonMobil’s Baytown facility and made significant progress on a $1.8 billion blue hydrogen project in Beaumont, Texas. The company also completed major air separation unit expansions in China, meeting increased demand for rare gases and semiconductor-grade nitrogen. While these initiatives fueled growth in many areas, the EMEA (Europe, the Middle East, and Africa) region’s sales fell by 2% due to lower industrial activity in manufacturing and chemicals.
Looking ahead, the company remains optimistic about its prospects, projecting an 8%-11% increase in adjusted EPS in 2025. This expansion will be aided by a $10.4 billion project backlog and ongoing investments in industrial gas infrastructure and hydrogen production. Capital expenditures are expected to be between $5 billion and $5.5 billion, highlighting Linde’s strong long-term position in both the energy transition and industrial applications.
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 81
Chevron Corporation (NYSE:CVX) is a global leader in integrated energy and chemicals, with operations across various industries. The company’s operations include upstream exploration, production, and transportation of crude oil and natural gas, as well as downstream refining, marketing, and petrochemical manufacturing. Chevron is also at the forefront of carbon capture, renewable fuels, and gas-to-liquids technology, all of which help shape the future of energy infrastructure.
Chevron Corporation (NYSE:CVX) reported a strong performance in Q4 ended 31 December 2024, earning $3.2 billion, up from $2.3 billion in the same period in 2023. Adjusted for one-time factors, earnings were $3.6 billion, reflecting a mix of challenges and accomplishments. While refined product margins were lower and severance charges reduced profits, these impacts were partially offset by volume growth and favorable foreign currency effects. Full-year 2024 production reached new highs, with a 7% increase in global output and a notable 19% increase in U.S. production, primarily due to the company’s expansion in the Permian Basin. This outstanding performance allowed Chevron to return a record $27.0 billion to shareholders through dividends and buybacks, highlighting the company’s strong cash flows.
Chevron Corporation (NYSE:CVX)’s ability to execute complex, high-impact projects was fully demonstrated in 2024. One of the most significant accomplishments was the completion of the 20,000-psi Anchor project in the Gulf of Mexico, a groundbreaking deepwater venture. Furthermore, the company successfully ramped up production in Kazakhstan’s Tengiz field, solidifying its position in the energy sector.
Looking ahead, Chevron Corporation (NYSE:CVX) remains dedicated to both operational efficiency and long-term sustainability. The company is focused on cost control, aiming to reduce structural costs by $2 billion to $3 billion by 2026. At the same time, it continues to prioritize investments in energy transition initiatives, such as carbon capture and natural gas supply expansion. With capital expenditures expected to remain stable, Chevron’s strategic investments are poised to ensure continued production growth and cash flow resilience, positioning the company well for the future of energy.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 85
ConocoPhillips (NYSE:COP) is an independent exploration and production company that specializes in natural gas, liquefied natural gas (LNG), and crude oil and has established a strong presence in the Asia-Pacific, Europe, Canada, and the U.S. shale basins. The company maintains a strong presence in LNG markets due to key contracts and strategic assets that foster long-term expansion.
ConocoPhillips (NYSE:COP) produced 1.84 million barrels of oil equivalent per day (MMBOED) in 2024, marking a 3% increase from the previous year. This growth was primarily driven by a notable increase in LNG volumes and strong performance from U.S. shale operations. The company generated $21.3 billion in operating cash flow, driven by its efforts to maintain capital discipline and capitalize on rising commodity prices. However, because of increased operating costs and acquisition-related expenses that affected overall profitability, net income decreased to $11.2 billion from $18.7 billion in 2023.
ConocoPhillips (NYSE:COP) made great progress in growing its LNG strategy despite the profitability issues. The company established a long-term LNG sales agreement in Asia and obtained a long-term regasification agreement for Belgium’s Zeebrugge LNG terminal in 2024. In addition, the company has significant stakes in LNG production plants in Australia and Qatar. Furthermore, the company secured a long-term capacity agreement for the Zeebrugge terminal, operated by Fluxys, thereby solidifying its LNG business as a crucial area of expansion.
ConocoPhillips (NYSE:COP) announced $1.3 billion in asset divestitures as part of its plan to simplify its holdings and strengthen its financial position. The $735 million sale of the company’s interests in the Ursa and Europa Fields to Shell, which is anticipated to close by Q2 2025, came after the company’s $22.5 billion acquisition of Marathon Oil. The company also divested $600 million worth of non-core Lower 48 assets. These steps will help strengthen the company’s balance sheet and optimize its portfolio for future growth as part of its larger asset disposition target of $2 billion.
Going forward, ConocoPhillips (NYSE:COP) is committed to maintaining its current growth trajectory. With a continued focus on long-cycle projects and high-return shale assets, the company anticipates that production will range between 2.34 million and 2.38 million barrels of oil equivalent per day in 2025. To balance investments and guarantee long-term value creation, ConocoPhillips has set a target shareholder return of $10 billion. As it continues its trajectory of steady growth and innovation, the company is well-positioned to prosper in a dynamic and frequently volatile market environment.
2. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 88
Freeport-McMoRan Inc. (NYSE:FCX) is a prominent global mining corporation. It deals in the discovery and extraction of essential metals like copper, gold, and molybdenum, along with other vital minerals. Operating some of the most important mining assets in the world, such as Grasberg, Morenci, Cerro Verde, and El Abra, Freeport has a diverse portfolio that spans North America, South America, and Indonesia. The company’s vast resource base makes it an important supplier of metals for clean energy, infrastructure development, and various industrial uses.
Freeport-McMoRan’s EBITDA increased by a significant 14% in 2024, reaching $10 billion. This was driven by strong copper prices, which averaged $4.21 per pound, along with steady gold and molybdenum production. The business’s operating cash flows increased by 35% to over $7 billion, providing sufficient capital for strategic expansion projects. One notable accomplishment was the leach initiative, which greatly improved the company’s financial performance by delivering a 50% increase in incremental copper production over 2023. Nevertheless, Freeport-McMoRan Inc. (NYSE:FCX) encountered some short-term difficulties that affected operations despite these impressive outcomes, such as delays in Indonesian export permits and a 7.5% export tax. In addition, a fire at the Grasberg smelter required repairs totaling $100 million, though insurance covered these expenses.
In order to increase productivity and cut expenses, Freeport-McMoRan Inc. (NYSE:FCX) is concentrating on developing technological initiatives in the future. The Bagdad autonomous haulage system, scheduled for deployment in 2025, is one such project aimed at improving productivity and streamlining operations. Building on its impressive 2024 gains, the company is also expanding its leach opportunities, targeting an annual copper production rate of 300 million pounds by the end of 2025. These developments are anticipated to further boost Freeport’s long-term productivity and profitability, especially when paired with brownfield expansions in South America and the United States.
With capital expenditures reaching $4.4 billion annually, Freeport-McMoRan Inc. (NYSE:FCX) remains dedicated to balancing financial restraint and growth investments. As one of the top resource stocks for long-term investment, Freeport-McMoRan is well-positioned to continue growing due to its solid market foundation and continuous operational enhancements.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 104
As a prominent player in the global energy sector, Exxon Mobil Corporation (NYSE:XOM) is extensively involved in the exploration, production, refining, and distribution of gas, oil, and petrochemical products. With operations spanning several continents, the company continuously strives to advance its low-carbon initiatives while optimizing production efficiency.
Exxon Mobil Corporation (NYSE:XOM) reported earnings of $34 billion in the year ended 31 December 2024, which was the third-highest amount in the previous ten years. This success was supported by an outstanding Return on Capital Employed (ROCE) of 13%, which rose to 17% when cash balances and projects under construction were excluded, along with $55 billion in operating cash flow. Exxon has demonstrated a long-standing commitment to providing value to its shareholders, maintaining its $20 billion annual buyback program and increasing dividends for 42 consecutive years.
Moreover, Exxon Mobil Corporation (NYSE:XOM)’s expansion in the Permian Basin and Guyana is expected to improve its production prospects. With a projected Q3 2025 launch date, the Yellowtail project is expected to significantly increase the company’s global output. Permian volumes are expected to reach all-time highs as a result of the Pioneer acquisition, which is expected to generate over $3 billion in annual synergies. In addition, Exxon Mobil is moving forward with important downstream projects like the Singapore Resid Upgrade and the China Chemical Complex, which are expected to generate over $3 billion in additional revenue by 2026.
Despite short-term challenges in softening chemical markets, Exxon Mobil Corporation (NYSE:XOM) maintains strong growth momentum due to its record-high liquids production and strategic investments. Together with its ongoing production growth and expansion plans, the emphasis on sustainable energy solidifies Exxon Mobil’s standing as one of the top natural resource stocks for investment.
Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the best natural resources stocks to invest in according to hedge funds. While we acknowledge the potential of XOM, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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