Copper prices have been rising, and this bodes well for copper stocks. In fact, copper could rise to over $3 per pound in 2017 if demand holds up. There is incentive for copper companies to increase production to take advantage of the better prices.

Copper stocks have been beaten down for a long time, and 2017 should give them some relief. That is no reason to pick just any copper stock. It is a reason to perform due diligence and make some choices that will have the most reasonable prospects for success.

We have chosen five copper stocks that should do well in 2017 based on their resilience through the down times. All figures are current as of July 17, 2017. Here are how the five stocks break down:

1. Southern Copper Corp.

The stock of Southern Copper (SCCO) broke sharply higher in November 2016 and has started forming a new base to consolidate its gains. Its 1.32% dividend could grow if the company continues to prosper from rising copper prices. SCCO's quarterly income and total revenues have been climbing.

  • Avg. Volume: 709,847
  • Market Cap: $28.67 billion
  • PE Ratio (TTM): 31.67
  • EPS (TTM): 1.17
  • Dividend & Yield: 0.48 (1.32%)

2. Freeport-McMoRan Inc.

As the world’s largest copper miner, Freeport-McMoRan (FCX) suffered greatly during the copper price decline, but it stands to prosper as copper rises. The company is simply in the best position worldwide to increase production and take advantage of profitable copper prices.

Freeport-McMoRan could move into a position where it can resume its dividend. The stock has been moving sideways in 2017.

  • Avg. Volume: 19,255,525
  • Market Cap: $18.23 billion
  • PE Ratio (TTM): 67.38
  • EPS (TTM): 0.19
  • Dividend & Yield: 0.00 (0.00%)

3. BHP Billiton Ltd.

BHP Billiton (BHP) has a widely-diversified mining operation, but it makes the list of copper stocks to watch because it owns BH Copper. The stock has been steadily climbing since mid-June 2017.

  • Avg. Volume: 2,806,434
  • Market Cap: $102.14 billion
  • PE Ratio (TTM): 42.27
  • EPS (TTM): 0.93
  • Dividend & Yield: 1.08 (2.81%)

4. Anglo American plc

This company mines for a variety of metals, including copper. The chart on Anglo American plc (AAL.L) shows a steady and orderly rise throughout most of 2016, but a significant downtrend for the first half of 2017.

The company has been in business since 1917, so this is a reliable pick for those who want exposure to miners in general and copper in particular.

  • Avg. Volume: 6,452,396
  • Market Cap: $1.569 trillion
  • PE Ratio (TTM): 9.08
  • EPS (TTM): 123
  • Dividend & Yield: 0.00 (0.00%)

5. Rio Tinto

Rio Tinto (RIO) pays a 3.81% dividend. Production levels have been rising, and the stock has been in an uptrend for more than a year. The company mines other metals besides copper, which helps stabilize the stock price because RIO is not dependent on the price of any single metal for profitability.

  • Avg. Volume: 3,126,752
  • Market Cap: $80.774 billion
  • PE Ratio (TTM): 17.69
  • EPS (TTM): 2.55
  • Dividend & Yield: 1.70 (3.81%)

The Bottom Line

It should be noted that Codelco, a very large Chilean copper miner, did not make this list because it is state-owned and therefore is subject to non-market influences that could affect its value.

The five copper stocks on our list are all miners, so they are likely to directly profit from rising copper prices and do not depend on secondary income sources such as futures contracts. All five are large enough that they have assets they could sell should a sudden downturn in copper hit.

All five also have extensive copper reserves in place that they can put on the market anytime they choose. This will help them take advantage of any sudden spikes in the price of copper. The reserves can also be sold if any of the companies want to raise cash for a new opportunity.

Investors in copper must watch two indicators at once: 1) the financial health of the company, and 2) the trend in copper prices worldwide. Going long on any of these stocks will require regular reading of reports on supply and demand for copper. (See also: What Factors Affect the Price of Copper?)

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