Investing in the mining sector is always a terrific way to gain exposure to the price movement of commodities. Whether the market is volatile,Â or as the economy grows, so does the demand for metals and minerals. As an investor with shares in the top mining companies, you stand to generate more profits.
That said, this strategy cannot succeed by picking any random mining stock. To pull it off well and set yourself up for long-term wealth growth, you must choose companies with strong financials and long-term growth potential.
To this end, these two top Canadian mining stocks warrant a better look, if not a place in your self-directed portfolio.
Agnico Eagle Mines (TSX:AEM) is a $33.89 billion market capitalization Canadian gold producer. Headquartered in Toronto, the company has operations worldwide from Canada to Finland, Australia, and Mexico.
It also has several exploration and development activities underway across the border. For investors seeking exposure to gold during a harsh economic environment, AEM stock can present a good bet.
The companyâs second-quarter (Q2) 2023 earnings reflect that potential. Compared to the same period last year, Agnico Eagle Mines saw its revenues increase by 8.7%, along with an uptick of 15,000 ounces of payable gold production.
Its cost per ounce hit US$840 compared to US$726 in the same period last year. As of this writing, Agnico Eagle Mines stock trades for $68.07 per share, paying its investors payouts at a 3.17% dividend yield.
While gold is the go-to safe-haven asset to counter market uncertainty, lithium is the metal for when the economy is booming. To this end, Lithium Americas (TSX:LAC) can be an excellent stock to consider adding to your self-directed portfolio.
Headquartered in Vancouver, the $1.31 billion market capitalization company operates in Argentina and across the border down south. The company explores several lithium deposits, with ventures like the Thacker Pass and Cauchari-Olaroz projects under its belt.
Lithium is a critical raw material for battery production for devices integral to our lives. Exposure to this commodity seems only natural. Lithium Americas recently announced that it is seeking a US$1 billion loan for its Nevada Project from the U.S. Department of Energy.
The Nevada Project has the potential to become the largest lithium reserve in North America. If successful, the endeavour can relieve the regionâs reliance on imports from China.
Meanwhile, the Cauchari-Olaroz project is already on its way to achieving the goal of creating battery-grade lithium carbonate. This development signifies immense growth for the company and increased shareholder value.
As of this writing, Lithium Americas stock trades for $8.85 per share. Down by 44.72% from its October 4, 2023, high, it can be a great entry point for investors interested in exposure to the lithium market.
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Considering the ongoing projects and strong financials, Agnico Eagle Mines stock and Lithium Americas stock both offer solid long-term growth prospects.
Investing in the shares of these two companies right now can set you up for success due to the possibility of growing shareholder value through exposure to commodities. If investing in commodities fits your idea, these two Canadian mining stocks can be worth adding to your self-directed portfolio.
Before you consider Agnico Eagle Mines, you’ll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in October 2023… and Agnico Eagle Mines wasn’t on the list.
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See the 5 Stocks
* Returns as of 10/10/23
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