Considered a “native metal” due to its natural occurrence in nature as a usable metal, copper has been used by humans for thousands of years. Copper was also the first metal to be smelted from sulphide ores, the first metal to be cast in a mold, and the first metal to be alloyed with another metal.

Copper has exceptionally high thermal and electrical conductivity, making it an ideal metal for electrical applications. As a result, copper has multiple uses in the emerging electric vehicle (EV) industry, including charging stations, vehicles, and other EV products and applications. Copper is also a constituent of various metal alloys and is used as a building material.

Due to its useful qualities, copper can be found in just about any device that relies on electricity, so the demand for copper tends to increase as the economy grows. As the global economy emerges from the crisis caused by the COVID-19 pandemic, the price of copper and its derivatives has increased due to higher anticipated consumption.

In addition, expectations of future inflation resulting from the stimulus measures taken over the past year have increased, which may increase the price of durable assets like copper. This could make investing in copper mining stocks a prudent choice, both as a hedge against inflation and for capital appreciation. Benzinga’s choices for the best copper stocks to invest in are highlighted below.

Overview: copper stocks

Copper – a soft, ductile, malleable red colored metal that is one of the most versatile and widely used metals of the modern era – was the first metal to be used by humans.

Copper is also widely used in coin minting and in industrial machinery such as heat exchangers. Copper salts have historically been used as pigments, while other copper compounds have been used as bacteriostatic and fungicidal agents. Copper is also an essential mineral for all living organisms and is found in humans primarily in the liver, muscles and bones.

Due to the use of copper in infrastructure and construction, the price of copper is strongly influenced by the strength of the housing market and the growth rate of countries classified as emerging markets. Unlike other precious metals which primarily tend to appreciate in times of uncertainty, copper prices also rise in booming economies, making copper stocks an attractive investment for market optimists.

Best Online Brokers For Copper Stocks

Two of Benzinga’s copper stock picks (FCX and TECK) trade on the New York Stock Exchange (NYSE) and can be traded through any major US stock broker. The other three stocks (CPPMF, FQVLF and SLSSF) trade in the over-the-counter (OTC) market, so you should check that your broker allows you to access this market if you are interested in trading them.

Features to look for in a copper stock

1. Proven assets and production

Due to the amount of copper available in the world, most copper miners rely on their current and future production for an accurate assessment of the business. For example, Freeport-McMoRan is one of the best stocks on our list because it operates large mining assets that have been found to contain substantial reserves of copper and other precious metals.

2. Fundamentals

As with any publicly traded company, the underlying fundamentals of the company have a strong bearing on the appreciation of its shares in the future. A company’s operating profit, income, debt burden, and capital expenditures all make a difference and are reflected in the company’s stock price. Check if the stock pays a dividend and consider its earnings per share as useful fundamental indicators of the overall financial health of the company that should be considered when investing. Additionally, geopolitical and natural disasters occurring at a company’s mine site could significantly affect its stock price due to production reduction expectations.

3. Partnerships

While copper reserves are in the United States, most of the major copper mines are located in South America. To obtain an interest in a foreign mining asset, companies generally must either obtain approval from the government of the country where the mine is located or partner with a company located in that country that owns or can purchase the asset.

Now is a good time to invest in copper stocks?

A difference between copper and investment metals like gold is that copper has a myriad of industrial uses and generally has high demand. As global economies begin to recover from the COVID-19 pandemic, copper and copper mining stocks have a decent chance of appreciating. The main risk is that the demand for copper will decline if the global economy weakens again. Now is the time to invest in copper stocks if your economic outlook remains favorable.