Freeport-McMoRan Copper & Gold Inc. (FCX), Southern Copper Corp (SCCO), Rio Tinto plc (ADR) (RIO): Can You Unearth Gains From These Stocks?

Miners are now surprising income plays

Global precious metal producers are counted on for growth much more than income from the investing community. However, as a result of their stock prices getting crushed over the past couple years, certain miners offer surprisingly high dividend yields.

Since prices and yields are inversely related, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) and Rio Tinto in particular sport nearly 4% yields. While it’s true that interest rates have climbed lately, 4% dividend yields remain attractive, considering the 10-Year Treasury Bond is still at just 2.8%.

A 4% yield can effectively blunt the impact of a volatile stock price, as well as provide meaningful downside protection should precious metals plummet further.

A Foolish opportunity among mining stocks?

Prices of precious metals are hard to predict and often swing wildly. As a result, investors may very well experience continued volatility from miners like these three. However, if you can put aside the psychological distress of volatility, there’s a long-term buy-and-hold case to be made for well-run mining powerhouses like Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Southern Copper Corp (NYSE:SCCO), and Rio Tinto plc (ADR) (NYSE:RIO).

Companies engaged in precious metals are often best to buy when global commodity prices are in prolonged downtrends. If you believe gold and copper prices are near a bottom, you’re being offered bargain-bin prices. Moreover, should volatility continue, you’re at least being paid handsomely to wait for the turnaround in precious metals. As a result, long-term, patient investors should consider these mining giants at today’s rock-bottom prices.

The article Can You Unearth Gains From These Stocks? originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold.

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