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Iron stocks may not get a lot of attention among investors these days, but iron mining and processing is still a huge industry. After all, iron is a primary ingredient in steel, a key component of much of the world's infrastructure, including apartment buildings, office towers, bridges, and tunnels, as well as machines such as cars, washing machines, and even cargo ships.
If large and diverse is what you're looking for from your iron stocks, you can't beat BHP Group. With operations in steel-making commodities such as iron and metallurgical coal and high-tech base metals such as copper and nickel, BHP has a lot of growth levers to pull.
In fiscal 2024, which ended in June 2024, it produced 259.7 million tons of iron ore used for infrastructure and manufacturing, making it one of the biggest global iron ore producers. The company says it's the lowest-cost major iron ore company in the world, giving it a competitive advantage since it can earn a wider margin than its peers. In fact, in 2024, it reported an earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 68% in iron ore. Almost all of its iron ore comes from its Western Australia iron ore mine, and it's targeting 330 million tons of annual production over the long term. BHP's dividend fluctuates according to performance, but the stock currently offers a generous 5% yield.
Like BHP, Rio Tinto is a large, diverse company that focuses exclusively on mining metals and minerals such as diamonds. Iron ore made up $29.3 billion of the company's $53.7 billion in sales in 2024 as lower prices weighed on revenue and profits.
Iron ore volume fell slightly from 331.5 million tons to 328 million tons, and iron revenue declined from $32.2 billion to $29.3 billion due to lower prices for the key steel input. Underlying EBITDA in the segment fell 19% to $16.2 billion, showing how profitable those operations are (at least before backing out depreciation, which tends to be an expensive line item for mining companies).
Current management is focused on recovering from the 2020 scandal when it blasted a 4,000-year-old aboriginal site in Australia, an issue that led to the resignation of both the CEO and board chairman and business performance has been steady since. Rio Tinto is also an attractive dividend stock, offering a dividend yield of 6.4%.
If you're looking for a pure-play iron mining stock, Vale is about the best you're going to do. In 2024, 83% of its $38.1 billion in revenue came from ferrous minerals or iron-based metals, most of which were iron ore. Copper and nickel made up most of the remainder of its revenue.
Operating income fell 24% to $10.8 billion as falling commodity prices weighed on Vale, and gross margin declined from 42.3% to 36.2%.
Vale has sharpened its focus on safety after its Brumadinho dam in Brazil collapsed in 2019, killing 270 people. The disaster led to financial, legal, and reputational damage for Vale, and senior managers in charge of the dam were arrested. As a result, the company is decommissioning 30 dams and aiming for zero high-risk injuries by 2025. As of 2024, it had decommissioned 17 dams.
Like the other large miners, Vale is also a dividend powerhouse and currently offers a yield of 14%.
Anglo American is a diversified miner with four business segments: diamonds; base metals, including copper and nickel; platinum and related metals; and iron ore. The company entered an agreement in 2024 to sell its steelmaking coal and nickel businesses for $5.3 billion.
In 2024, iron ore was its second most profitable segment after copper, with $2.7 billion in EBITDA out of a total of $8.4 billion. Iron ore profits were down roughly a third from 2023 due to falling profits, and overall EBITDA fell 1% to $8.5 billion.
The stock currently offers a dividend yield of 2.1%, considerably lower than its peers. The company is in the process of opening the Quellaveco copper mine in Peru this year, which is expected to produce more than 400,000 tons of copper annually after it ramps up and generates another $3.9 billion in annual revenue at current prices. The mine will be powered by renewable energy, helping the company accomplish its goal of reducing its carbon footprint.
Based in Luxembourg, ArcelorMittal is the largest steel producer in Europe and one of the largest in the world. In 2024, it produced 54.3 million tons of steel and 42.4 million tons of iron ore. Production was roughly flat in 2024, though revenue declined due to the same pricing pressures that its peers faced.
As a market leader in steel, the company has a number of competitive advantages. In automotive steel, it has production facilities around the world, giving it a proximity advantage in supplying nearby manufacturers since transporting these materials can be expensive. Unlike most steel manufacturers, ArcelorMittal is vertically integrated with its own iron mining operations, and the company believes it can use those materials more efficiently than its peers since it has more control over them. Vertical integration also helps with procurement and lowering logistics costs, and ArcelorMittal can focus its mining operations on iron that is highly valued for steel.
Still, like any mining company, Arcelor Mittal is sensitive to commodity prices, and it finished 2024 with an EBITDA margin of 11%. The stock offers a dividend yield of 1.5%.
Cleveland-Cliffs is the largest flat-rolled steel producer in North America and manufacturer of iron ore pellets. Like ArcelorMittal, the company is vertically integrated from raw materials mining to steelmaking and end-product processes such as stamping and tubing. It's also the largest steel supplier to the North American auto industry.
The company mined 24 million tons of iron ore last year, which is significantly less than other companies on this list. That's partially because iron mining is concentrated in other parts of the world, such as Australia and South America, and Cleveland-Cliffs only has mines in Michigan and Minnesota. Cleveland-Cliffs acquired ArcelorMittal USA at the end of 2020, which helped it consolidate its leadership in U.S. iron mining and steel production. In addition, it reported an operating loss of $756 million in 2024. Even so, the company is optimistic about 2025 due in part to protectionist trade policies that could lift domestic prices for steel and benefit Cleveland-Cliffs. Unlike its peers, Cleveland-Cliffs does not pay a dividend.
Iron's role in the global economy is unlikely to be diminished, given the essential nature of steel in industries such as construction and manufacturing. Meanwhile, demand for infrastructure, appliances, and vehicles only appears likely to grow. However, as a commodity, the price of iron can fluctuate broadly in response to market forces, and increasing volume won't necessarily mean increasing profits.
With iron prices under pressure, most of these stocks have struggled recently. The trade war initiated by the U.S. could roil global iron and steel markets, having a mixed impact on these producers, depending on where they're based and where they do business.
If you're a dividend investor or a fan of value stocks, iron stocks could be a good choice for you, but be aware that the sector is sensitive to commodity prices and is likely to suffer in a recession.
Commodity prices have come down from a peak a few years ago as supply chain shortages and other challenges from the COVID-19 pandemic have eased, and you may be wondering if now is a good time to buy iron stocks. Keep reading below to learn more about iron mining stocks and which ones to invest in today.
Most iron mining companies are not pure-play iron stocks. They mine other industrial metals such as copper, and many have downstream operations, including smelting and even steel production. With that in mind, let's take a look at some of the metal stocks that play a role in the iron stock market.
| Name and ticker | Market cap | Industry |
|---|---|---|
| BHP Group (NYSE:BHP) | $141.9 billion | Metals and Mining |
| Rio Tinto Group (NYSE:RIO) | $77.9 billion | Metals and Mining |
| Vale (NYSE:VALE) | $43.8 billion | Metals and Mining |
| Anglo American Plc (OTC:NGLOY) | $32.1 billion | Metals and Mining |
| ArcelorMittal (NYSE:MT) | $25.0 billion | Metals and Mining |
| Cleveland-Cliffs (NYSE:CLF) | $5.3 billion | Metals and Mining |
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
