Going underground: Reliable income is a target for many investors
By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY 19 February 2022:
For many investors, a reliable income stream from dividends is the Holy Grail. At present that grail is largely composed of copper, gold, and even vanadium – as much of the dividend growth from the UK stock market is coming from the mining and resources sector.
Mining giants Glencore and BHP both announced record dividends in the past few days.
And while some investors may have issues about their environmental credentials, it should not be forgotten that it is these companies that are supplying some of the materials that are driving the transformation of the global economy towards a more sustainable one…
Unearth stocks with a rich heritage
Unlike some of today’s technology stocks, the mining and resources stocks listed on the London Stock Exchange have a long history…
So while these companies are transforming themselves into sustainable businesses, there is always the risk that their history – and continued use of fossil fuels in the extraction of metals – will dog their attempts to move forward.
Tap into resources for a sustainable future
Despite these problems, miners have a lot going for them in the current environment.
The price of mining stocks is heavily correlated with that of commodities, which have gone up sharply in recent months.
Miners have also done a good job in recent years in being more disciplined about costs, which has allowed them to pay juicy dividends to their shareholders.
Try funds that invest on profitable metals
If you’d rather not buy individual stocks, there are numerous investment funds that will give exposure to rising metal prices…
Matthew Read of investment trust research group QuotedData, prefers fund CQS Natural Resources Growth & Income because of its ability to hunt down less well researched commodity companies.
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