Freeport-McMoRan Copper & Gold Inc. (FCX): This Stock Is the Best Copper Play

Brazilian Vale SA (ADR) (NYSE:VALE) is also present on the copper market. Copper is one of the numerous resources that Vale mines, but in today’s environment, every positive development is welcome. The stock is down 30% this year. It trades at a 6.1 forward P/E and pays an impressive dividend that yields 5.2%. If you believe in the future of resource companies, Vale is a great dividend play.

BHP Billiton Limited (ADR) (NYSE:BHP) has several copper mines in its portfolio, including the Escondida mine in Chile, which is the world’s largest single producer of copper. BHP Billiton is down 17% year-to-date. It trades at 18 forward P/E and pays a dividend that yields 3.5%. Besides metals exposure, BHP Billiton is engaged in the oil and gas business. This helps the stock a little, since oil and gas prices are more stable this year.

Rio Tinto plc (ADR) (NYSE:RIO) has a 30% interest in the aforementioned Escondida mine, which is operated by BHP Billiton. Apart from that, Rio Tinto mines for gold in numerous countries such as Australia, Indonesia, Mongolia, Peru, South Africa and USA. Copper is a sizable part of Rio Tinto’s business. The stock trades at 6.6 forward P/E. It pays a dividend that yields 4.2%. I would consider this stock as good dividend play.

Good value

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) trades at a 7.4 forward P/E and pays a dividend that yields 4.0%. Analysts mean target price for the stock is $37.41, which is 21% higher than the current price. I think that the stock could do even better when the copper and gold prices recover. The company has a diversified asset base with assets located in North America, South America, Africa and Asia.

The recent move has exposed the company to the oil and gas industry, which is in a good shape now. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) is the best copper play because it gets a big part of its revenue from copper and, at the meantime, is diversified in a non-mining industry.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool owns shares of Companhia Vale Ads and Freeport-McMoRan Copper & Gold

The article This Stock Is the Best Copper Play originally appeared on Fool.com.

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