Watchlist Stock 1
Rio Tinto(NYSE: RIO) is one of the top leading metals and mining companies. It supplies the three key industrial metals — iron ore, aluminum, and copper — as well as a few other important minerals and metals. Rio prioritizes the highest demand for industrial metals sought by the global economy. For example, iron ore is the base material used to make steel, which can be found in buildings, wind turbines, cars, and appliances. Copper is another high-demand metal as it is an excellent conductor of electricity, making it essential for electronics and electric vehicles.
Lastly, aluminum is a lightweight metal used to produce jet engines, electric vehicles, and cell phones. These metals are highly dependent on changes in the global economy. Rio Tinto combats this using one of the lowest-cost operations in the world. It is a leader in product innovation, which has included the use of autonomous drills and trucks as well as data science and data analytics to lower expenses and improve efficiency.
Rio Tinto completes its low costs with a strong balance sheet. While Rio Tinto supplies economically sensitive metals, they hold ever-increasing importance to the economy and future. Copper and steel are base materials for developing renewable energy, while copper and aluminum are key for electric vehicles and technology applications. As a result, demand for the minerals Rio produces should increase in the coming years, with opportunities to create value for investors. Add to your watchlist for future inclusion in your portfolio.
Watchlist Stock 2
Lyondellbasell(NYSE: LYB) is one of the biggest plastics, chemicals ,and refining companies nationwide. It creates products that are dire for food safety, protecting the purity of water supplies, and improving the safety, comfort and fuel efficiency of vehicles. Many of Lyondellbasell’s products are also sensitive to economic conditions. Despite this, the company reduces some of that impact through its diversified portfolio of products and low cost of operations. Additionally, the company combines these benefits with a strong, investment-grade balance sheet.
All these factors allow Lyondellbasell to accumulate large cash flows. This allows them to expand operations through organic growth projects, strategic joint ventures, and acquisitions while returning money to shareholders via dividends and share repurchases. By adding this stock to your watchlist you can observe how Lyondellbasell’s strategy of growth and cash returns can grow shareholder value over the long term.
Watchlist Stock 3
International Paper(NYSE: IP) is one of the largest producers of packaging, pulp, and paper throughout the world. The company generates a majority of its money-creating industrial packaging, such as cardboard containers used to ship food. The company also makes cellulose fibers — absorbent materials such as those found in diapers — and printable paper products.
Currently, they aim to spin off its printing papers segment in early 2021 to focus on becoming a low-cost leader in the industrial packaging industry. International Paper prioritizes maintaining one of the lowest-cost producers of the products it manufactures. It lowers costs by operating manufacturing plants near timber forests, which allows the company low-cost sources of sustainable wood resources.
International Paper also organizes costs through operational excellence and innovation. International Paper also has a strong balance sheet. While demand for other industrial packaging can slow and fluctuate with the economy, the demand for many of International Paper’s products remains steady. As a result, the company accumulates reasonably consistent cash flow, which allows the funds to expand as well as to return money to shareholders via dividends and buybacks.
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