Copper prices have been rising, tearing higher into the beginning of 2018. After some declines in conjunction with the recent market volatility, the metal's price is currently at roughly $3.05 per pound. The overall uptrend in prices bodes well for copper stocks, as it means there is incentive for copper companies to increase production to take advantage of the better prices.

Copper stocks were beaten down for a long time, but 2017 gave them some relief, with a particularly strong rally throughout December in response to rising copper prices. 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. (For a primer on investing in this metal, check out: Commodities: Copper.)

We have chosen five copper stocks that should do well in 2018 based on their resilience through the down times. All figures are current as of April 7, 2018. Here is how the five stocks break down.

Southern Copper Corporation (SCCO​)

The stock of Southern Copper broke sharply higher several times throughout 2017. The shares finished the year on an even stronger note, rising more than 12.5% in the month of December alone. Although the stock ticked downward along with the broader markets in early February 2018, it has been rising sharply since then and is now more than 20% above the correction low posted on Feb. 8. Its 2.21% dividend could continue to grow if the company keeps prospering from rising copper prices. Furthermore, Southern Copper's quarterly income and total revenues have been climbing. (See also: Copper Enters First Bull Market in 4 Years.)

Freeport-McMoRan Inc. (FCX)

As the world's largest copper miner, Freeport-McMoRan 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. Given the improving conditions, Freeport-McMoRan recently announced that it will resume its dividend. Shares posted dramatic gains in December 2017, rising 36% over the course of the month as the outlook for copper pricing improved, but in the early months of 2018, the stock price has seen some volatility without posting significant gains. (For more, see: Freeport Evacuating Indonesian Mine Worker Families After Shootings.)

  • Average Volume: 19,186,921
  • Market Cap: $25.091 billion
  • P/E Ratio (TTM): 13.83
  • EPS (TTM): $1.25
  • Dividend and Yield: $0.20 (1.15%)

BHP Billiton Limited (BHP)

BHP Billiton has a widely diversified mining operation, but it makes the list of copper stocks to watch because it owns BH Copper. The stock began to climb steadily starting in mid-June 2017, and after essentially moving sideways for a few months, it ticked sharply upward at the end of the year along with its industry peers. BHP Billiton shares have participated in the bout of market volatility starting in February 2018, and the stock is currently trading at $43.64. (See also: Beyond Gold: Top Picks in Industrial Metals.)

  • Average Volume: 3,043,795
  • Market Cap: $115.18 billion
  • P/E Ratio (TTM): 24.77
  • EPS (TTM): $1.76
  • Dividend and Yield: $2.20 (5.00%)

Anglo American plc (AAUKF/AAL.L)

This company mines for a variety of metals, including copper. The chart on Anglo American shows a steady and orderly rise throughout most of 2016, but the stock was in a base through the first part of 2017. It broke out of that base in June and began climbing, ending the year with strong gains. 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. (For more, see: Billionaire's Anglo American Bet Excites Investors.)

  • Average Volume (AAL.L):     6,125,838
  • Market Cap: GBp 22.658 billion
  • P/E Ratio (TTM): 6.61
  • EPS (TTM): GBp 245
  • Dividend and Yield: GBp 0.76 (4.44%)

Rio Tinto plc (RIO)

Rio Tinto pays a 4.27% 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 Tinto is not dependent on the price of any single metal for profitability. (See also: Is Rio Tinto a Great Stock for Value Investors?)

  • Average Volume: 3,286,754
  • Market Cap: $85.105 billion
  • P/E Ratio (TTM): 10.38
  • EPS (TTM): $4.87
  • Dividend and Yield: $2.20 (4.27%)

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 profit directly from rising copper prices and do not depend on secondary income sources such as futures contracts. All five companies are also 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 any time 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 a regular reading of reports on supply and demand for copper. (See also: What Factors Affect the Price of Copper?)

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