In this Article:
- Anglo American Platinum (OTC: ANGPY)
- Impala Platinum (OTC: IMPUY)
- A-Mark Precious Metals (Nasdaq: AMRK)
- Norilsk Nickel (OTC: NILSY)
- Sibanye Stillwater (NYSE: SBSW)
The stock market is never dull. You can always find an industry trending for one reason or another. So far this year, the top palladium stocks are outperforming the market, with commodity prices soaring.
In fact, commodity stocks are one of the only sectors with momentum right now. With inflation heating up, investors are looking to unload risk. And when this happens, the most significant moves often happen in energy stocks and commodities like precious metals.
After reaching an all-time high price of over $3,000/oz in May, prices have slipped along with overall market weakness. But prices are rebounding. They’re back over $2,200 with momentum building.
Growing demand is fueling the soaring prices. However, supply remains under pressure after closing several mines due to the pandemic. Unlike Gold and Silver, most of the world’s palladium comes from mining another mineral. As a result, the imbalance helps boost margins, leading to higher profits.
Top Palladium Stocks of 2022
Investing in 2022 has been a challenge so far. Previous strengths like growth stocks and tech look weak, with bond yields rising. That said, if you started investing after 2020, you might want to buckle up. It could be a bumpy ride.
With this in mind, commodity prices are heavily influenced by supply and demand. And with higher industry use, demand is pushing palladium prices to near ATHs.
The precious metal is primarily used to make catalytic converters. It turns toxic gases into CO2 and water vapor. Also being used in fuel cells powering cars and buses.
As governments and the private sector work together to promote less pollution, palladium is becoming a key piece. As a result, prices are rising by more than five-fold since 2016 lows. That said, here are the top five palladium stocks set to benefit from higher prices.
No. 5 Anglo American Platinum (OTC: ANGPY)
- Market Cap: 31.4B
- 1 Year Return: 15.9%
- 1 Year Revenue Growth: 155%
Headquartered in Johannesburg, Anglo American Platinum is the largest global producer of platinum. As a result, the company is also one of the largest palladium producers. In fact, the mining company has three segments: Platinum Group Metals, Base Metals and Precious Metals.
Despite several obstacles causing mine closures, this palladium stocks company is achieving record growth. In the first half of 2021, Anglo reached a record EBITDA of over $4 billion. Not only that, but the company offers an attractive 5.93% dividend yield.
No. 4 Impala Platinum (OTC: IMPUY)
- Market Cap: 12B
- 1 Year Return: 6.7%
- 1 Year Revenue Growth: 70.8%
Impala is another leading mining company with headquarters in South Africa. The company has several mining operations in South Africa, Canada and Zimbabwe.
After buying out North American Palladium in 2019, the company greatly increased its production ability. That said, revenue is soaring, up 70% year-over-year (YOY). And the record metal prices are boosting margins. Also, sales volume advanced 17% with higher demand for metals.
With solid cash flow, the company is rewarding investors with a current +10% dividend yield.
No. 3 A-Mark Precious Metals (Nasdaq: AMRK)
- Market Cap: 747M
- 1 Year Return: 89%
- 1 Year Revenue Growth: 70.8%
Rather than investing in miners, A-Mark Precious Metals is a precious metal trading company. So far, the company has three areas of business. These include Wholesale, Secured Lending and Direct to Consumer.
A-Mark sells precious metals including Gold, Silver, Platinum and Palladium in bars and coins.
With this in mind, the company is less prone to volatile metal prices than others on this list. The company is growing its top line with higher DTC sales and wider margins. Gross profit increased 55% in the first quarter reaching $56 million.
Keep reading for more information on palladium stocks.
No. 2 Norilsk Nickel (OTC: NILSY)
- Market Cap: 43.9B
- 1 Year Return: -9%
- 1 Year Revenue Growth: 33%
Based in Russia, Norilsk Nickel is the global leader in palladium production. On top of this, the company extracts other industrial metals like high-grade Nickel and Copper (needed for clean energy).
The mining firm is consistently growing its top and bottom line with a portfolio of high-quality metals. Other metals were falling in production in the first half of 2021. That said, Palladium production increased 5% with strong demand from the auto industry.
At the same time, there are a few things investors should be aware of before investing in Norilsk. For example, in August, Russia placed a tax on nickel and copper exports, two of the firm’s largest areas.
Palladium Stocks No. 1 Sibanye Stillwater (NYSE: SBSW)
- Market Cap: 10.89B
- 1 Year Return: -3%
- 1 Year Revenue Growth: 63%
Formerly known as Sibanye Gold, Sibanye Stillwater continues its aggressive growth, becoming a global leader in precious metals production. That said, the firm has a diverse portfolio, including gold, platinum, palladium and other PGMs.
Following its takeover of Lonmin in 2019, Sibanye became a global leader in platinum production. With this in mind, the company is achieving double-digit revenue growth since then with record earnings and cash flow.
That said, the firm is using the excess cash to pay down debt (-48% YOY) and pay dividends with over an 11% yield.
Investing in Palladium Stocks: What You Need to Know
Like many other metals, palladium prices are soaring with higher demand and a limited supply. Despite prices slipping slightly from record highs, they are trending upwards again.
As can be seen, when prices rise, palladium stocks generally follow the price action. The reason for this being higher prices drives higher margins. As a result, the extra earnings are usually passed on to investors.
So far, palladium stocks are off to a great start in 2022, with prices recovering from December lows. Yet, with EV sales set to make up 48% of all new cars sold in 2030, palladium could be in trouble.
Palladium is most useful in catalytic converters, something EVs will not need. Taking this into account, the metal prices could drop in the coming years. That said, the top palladium stocks going forward will have diverse portfolios.