Investing in Iron Stocks

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.

For the fiscal year ending in June 2024, BHP produced 263.4 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. For fiscal 2026, it expects a production cost of $18.25 to $19.75 per ton at its Western Australia Iron Ore operation, where almost all of its iron ore comes from. In fact, in 2024, it reported an earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 63% in iron ore. 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 4.1% yield.

2. Rio Tinto

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.

The company named Simon Trott as its new CEO in August 2025. He had previously led the company's iron ore division.

Rio Tinto is also an attractive dividend stock, offering a dividend yield of 6%.

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 11.3%.

4. Anglo American

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, which is highly valued for steel. It has also expanded through acquisitions, recently acquiring Nippon Steel's 50% stake in AM/NS Calvert, one of North America's most advanced steel-making facilities.

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 1.6%.

6. Cleveland-Cliffs

Cleveland-Cliffs is the largest flat-rolled steel producer in North America and a 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 in 2024, 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. Through the first half of 2025, however, steel prices have come down, leading to a negative gross profit for the company.

Unlike its peers, Cleveland-Cliffs does not pay a dividend.

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