Investing in Diamond Stocks

Investing in diamond stocks

Diamonds have been around for a long time, and the industry is well established. Investors looking for high growth should probably pass on this segment of the mining sector in favor of other stocks.

Additionally, there are plenty of diamond producers that fall into the penny stock category. Tread lightly with stocks that appear to trade on the cheap. However, for investors looking for big, well-established companies that offer slow but steady growth, a few names dominate the field and are worth a closer look.

1. LVMH Moet Hennessy Louis Vuitton

LVMH Moet Hennessy Louis Vuitton is the world's largest luxury conglomerate and the owner of some top names that embody high fashion. It's also highly involved in the crafting and retailing of diamonds and jewelry. Brands in the company's portfolio include iconic names such as Bulgari, Chaumet, and TAG Heuer.

2. Rio Tinto

London-based Rio Tinto is one of the largest global raw material producers. The mining giant extracts all sorts of products from the earth, such as iron ore, aluminum, and copper. Included in its globe-spanning operation are a couple of top-yielding diamond mines that make Rio Tinto one of the largest diamond producers in the world.

Industrial metals are Rio Tinto's primary moneymaker, and uses for these materials are growing in the manufacturing and technology industries, among others. Demand for Rio Tinto's products is cyclical, though, as is common for many raw material and mining companies.

Even so, Rio Tinto is one of the biggest and most stable metals producers out there. That makes it an ideal fit for investors who want some ancillary exposure to the diamond industry.

3. Anglo American

Anglo American is another top mining stock, and this one has global operations that produce platinum, copper, nickel, iron ore, and, of course, diamonds. Although metals and ore make up the bulk of Anglo American's sales, this is actually a top way to play the diamond industry.

4. Signet Jewelers

Signet Jewelers is one of the largest gemstone jewelry retail operations. Its subsidiaries include Kay, Zales, Jared, and more. The company boasts some 2,600 retail locations, most of which are located in the U.S.

The internet is changing consumer habits, though, and Signet has made some acquisitions to ensure it remains relevant in the digital era. In 2017, it purchased R2Net (parent of JamesAllen.com) to bolster its e-commerce presence, and in 2021, it acquired jewelry rental start-up Rocksbox and small destination jeweler Diamonds Direct.

Demand for jewelry soared in the wake of the COVID-19 pandemic, but sales slowed significantly in 2023 and 2024. The company plans to close 150 underperforming stores in response to sluggish sales. It's also seen a spike in demand for lab-grown diamonds.

There's no telling what the future holds for gemstone sales. But despite recent headwinds, Signet Jewelers remains a top option to consider in this niche of the retail world.

5. Senco Gold Ltd.

Diamond sales in the U.S. have faltered in recent years due to several factors, including inflation, changes in marriage trends, and the wider availability of lab-grown diamonds. But India is one part of the globe where demand for diamonds is soaring as the country's middle class grows. Today, India is the second-largest diamond market in the world.

Kolkata, India-based Senco Gold Ltd. is benefiting from the country's spiking demand for diamond jewelry and precious metals. The diamond and jewelry retailer has 175 showrooms in India and a presence in Dubai.

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