Commodity markets have been under immense pressure since Russia’s invasion of Ukraine due to a slew of economic sanctions imposed on one of the world’s largest commodity exporters and worsening supply chain disruptions. Russia is the second-largest exporter of…
crude oil and the leading exporter of several crops, coal, gold, and steel-based products. The import embargoes on Russia have significantly impacted the supply of such commodities to the global economy, causing commodity prices to surge over the past month. Furthermore, due to the destruction of infrastructure and the displacement of civilians, commodity exports from Ukraine have halted since the Russian invasion, worsening the commodity shortage.
Due to a resurgence of COVID-19 cases, commodity prices are expected to rally further in the near term with lockdowns in China. In addition, a global oil shock could aggravate the already volatile commodity markets, as several European nations explore a potential ban on Russian oil in the wake of increased war crimes allegedly committed by the country.
Because commodity prices are expected to climb more in the near term, we think investing in top-rated commodity stocks SunCoke Energy, Inc. (SXC), Yamana Gold Inc. (AUY), LyondellBasell Industries N.V. (LYB), Intrepid Potash, Inc. (IPI), and United States Steel Corporation (X) could reap substantial returns.
SunCoke Energy, Inc. (SXC)
SXC in Lisle, Ill., produces metallurgical and thermal coal through three segments: Domestic Coke; Brazil Coke; and Logistics. Its logistics business provides services to steel, coke (including coke-making facilities), electric utility, and coal production.
On Feb. 1, SXC declared a cash dividend of $0.08 per share on its common stock, which was paid on March 1, 2022.
SXC’s revenues increased 17.8% year-over-year to $365.30 million in its fourth quarter (ended December 31). Its adjusted EBITDA grew 70% from its year-ago value to $62.90 million, while its net profit improved 354% year-over-year to $12.70 million. The company’s EPS increased 350% from the year-ago value to $0.15.
Analysts expect SXC’s revenue for its fiscal second quarter (ending June 30, 2022) to be $370.40 million, representing 1.7% year-over-year growth. The Street expects the company’s EPS to increase 272.7% year-over-year to $0.19 in the next quarter.
The stock has gained 42.8% in price over the past year to close yesterday’s trading session at $9.15.
SXC’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
SXC has an A grade for Momentum and a B grade for Value and Quality. Within the A-rated Coal industry, it is ranked #3 of 11 stocks.
To see additional POWR Ratings for Growth, Stability, and Sentiment for SXC, click here.
Yamana Gold Inc. (AUY)
AUY in Toronto, Canada, is a producer of precious metals. It is engaged in gold and silver production, exploration properties, and land positions across the Americas. It owns various properties: Canadian Malartic, Jacobina, Cerro Moro, El Penon, Minera Florida, Wasamac Property, and Camflo Property.
On February 8, the company reported five-year results that have exceeded expectations. Furthermore, the company has effectively replaced depletion and increased mineral reserves, mineral resources, and its pipeline of exploration targets. Analysts expect AUY to continue to expand its production and thereby boost its free cash flows.
In the fourth quarter, ended Dec. 31, 2021, AUY’s revenues increased 9.1% year-over-year to $503.80 million, while its net earnings increased 6.5% from its year-ago value to $109.70 million.
Analysts expect AUY’s EPS and revenue to increase 1.3% and 13.7%, respectively, year-over-year to $0.06 and $479.95 million in its the fiscal first quarter (ended March 31, 2022).
AUY stock has gained 41.5% in price over the past three months.
AUY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. AUY also has a B grade for Quality and Sentiment. The stock is ranked #9 of 36 stocks in the Miners – Gold industry.
Click here to see the other ratings of AUY for Growth, Value, Momentum, and Stability.
LyondellBasell Industries N.V. (LYB)
LYB is a chemical company that conducts its operations through six segments: Olefins and Polyolefins-Americas; Olefins and Polyolefins-Europe, Asia, International (O&P-EAI); Intermediates and Derivatives (I&D); Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyolefins, polyethylene products, propylene oxide and its derivatives, oxyfuels, and various compounds and solutions. LYB is headquartered in Houston, Tex.
On April 12, LYB announced its goal to reduce greenhouse gas emissions, boost recycling of plastics and use renewable-based feedstock in its “Future Focused” sustainability report. The company is focused on achieving its circular and sustainable plastics and decarbonization goals in the coming years.
On February 2, LYB was named in Fortune Magazine’s World’s Most Admired Companies list for the fifth consecutive year. This recognition reflects LYB’s consistently strong performance within the industry.
In its fiscal year 2021 (ended Dec. 31, 2021), LYB’s sales and other operating revenues increased 66.4% year-over-year to $46.17 billion. Its net income increased 293.6% from its year-ago value to $5.62 billion, while its EBITDA grew 164.5% year-over-year to $8.69 billion. The company’s EPS came in at…
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