As the world moves toward a net-zero carbon economy, demand for raw materials from the metals and mining industries is expected to skyrocket. Raw materials will be at the forefront of decarbonization efforts and electrification as economies transition from fossil fuels to wind and solar power generation, battery-powered and fuel-cell-based electric vehicles (EVs), and hydrogen production.
Since rising inflation and surging COVID-19 cases continue to spook investors, the market is expected to remain turbulent in the near term. However, high dividend-paying stocks could be ideal bets in times of market volatility to ensure a steady income stream.
Thus, we think it could be wise to bet now on fundamentally sound mining stocks BHP Group (BHP – Get Rating) and Rio Tinto Group (RIO – Get Rating). They are currently yielding more than 8% and are trading at discounted valuations.
Headquartered in Melbourne, Australia, BHP explores for, develops, and produces oil and gas properties, and mines for copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal internationally. Petroleum; Copper; Iron Ore; and Coal are the company’s operational segments.
BHP’s profit from operations increased 80% year-over-year to $25.91 billion for the year ended June 30, 2021. Its net operating cash flow grew 73% from its year-ago value to $27.23 billion. And the company’s underlying EBITDA surged 69% from the prior-year period to $37.38 billion.
The stock has gained 20.8% in price over the past three months and 16.4% over the past month.
BHP’s $6.02 annual dividend yields 8.97% on its current stock price. On September 21, the company paid a $4 quarterly dividend. It has a four-year average dividend yield of 6.3%.