2 Top Commodities Stocks to Buy in September
Commodities, such as rare metals and energy products, are in high demand and available supplies cannot keep pace. Several reasons contribute to the disparity between demand and supply, from geopolitical tensions to supply chain issues. Such cases allow commodity-related companies to improve their financial performance through higher profit margins.
The looming threat of a recession and lower inflation rates pushed stock markets lower. This could be a great opportunity for investors interested in mining stocks and energy stocks find good deals on TSX at present.
Today I’m going to discuss two commodities stocks you can consider adding to your portfolio for this purpose.
Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a Canadian gold mining company with a market capitalization of $25.13 billion. It has operations in Canada, Finland and Mexico, as well as development and exploration activities that extend into the United States. Although it may not be the largest gold producing company, it is well positioned to provide investors with significant returns.
The company has a policy of not selling gold forward, which gives it full exposure to rising gold prices. As of this writing, shares of Agnico-Eagle Mines are trading at $54.32 per share and offer a hefty dividend yield of 3.77% – a rarity among gold mining stocks.
It is down 35.83% from its 52-week high at current levels. However, the company’s performance in the second quarter of fiscal 2022 saw it beat analysts’ earnings estimates of $0.16 per share by cutting its production costs. It can be a good investment at current levels.
Enbridge (TSX:ENB)(NYSE:ENB) is a $113.67 billion market capitalization multinational pipeline company headquartered in Calgary. Enbridge owns and operates an extensive network of pipelines that transport energy products throughout North America.
It’s a solid company with resilient cash flow, and it’s a Canadian dividend aristocrat with a long streak of increasing shareholder dividends.
As of this writing, Enbridge shares are trading at $55.39 per share and offering a hefty dividend yield of 6.21%. It is down 7.20% from its 52-week high at current levels, but it could be a great bet for commodity exposure. It is a low-risk business because almost all of its pipeline revenue comes from long-term contracts.
The company generated nearly 60% of its EBITDA (earnings before interest, taxes, depreciation and amortization) from its oil pipeline operations, 26% from its natural gas pipelines, 12% from its natural gas utility operations and 4% from its renewable energies. energy assets.
Enbridge also has several guaranteed capital projects in its pipeline that can increase cash flow by at least 5% by 2024. This can be a great investment at current levels.
Canada’s inflation rates were as high as 7.6% in July 2022, and August figures are expected to show a further deceleration to 7.5%. It remains to be seen whether we will see a significant slowdown in inflation rates.
Despite the deceleration of recent months, inflation rates in Canada are considerably higher than the 2% target range. Investors may have ample time to take advantage of the inflationary environment by investing in companies that benefit from it.
Agnico-Eagle Mines and Enbridge stocks can be excellent investments for gaining exposure to the mining industry and the energy industry, respectively.