Canada is the tenth-largest iron ore-producing country in the world as of 2024. As a key component in producing steel, iron ore is an important material in high demand. It is estimated that 98% of all iron ore produced is converted to steel.
This article will discuss the 5 top Canadian iron ore stocks in 2024 for you to consider.
- Labrador Iron Ore (TSE: LIF)
- Champion Iron Ltd (TSE: CIA)
- Black Iron Inc (TSE: BKI)
- Rio Tinto ADR plc (NYSE: RIO)
- BHP Group (NYSE: BHP)
The Best Iron Ore Stocks in Canada
1. Labrador Iron Ore
Here are some key facts for this stock:
| Ticker Symbol | TSE: LIF |
| Market Cap | $1.874 billion |
| 52-Week trading range | $27.04 to $34.18 |
| Dividend Yield | 8.61% |
| PE Ratio | 10.06 |
Labrador Iron Ore is the most well-known Canadian iron ore stock on the TSX. The company was founded in 2010 and is headquartered in Toronto.
LIORC, as it is more commonly referred to, is a royalty company. This means that all of its revenue comes from the cash flow from its investment in the Iron Ore Company of Canada. LIORC does not mine or produce iron ore, so it is not bound by operating costs or high-priced assets.
This stock is popular for its massive dividend yield. Currently, it sits at an annualized yield of 9.29%, which it pays out quarterly to shareholders. The yield is dictated by a certain percentage of revenue plus the market price of iron ore. As the price surged in recent years, so too did the dividend yield of LIORC.
2. Champion Iron Ltd
Here are some key facts for this stock:
| Ticker Symbol | TSE: CIA |
| Market Cap | $3.094 billion |
| 52-Week trading range | $4.57 – $7.76 |
| Dividend Yield | 3.09% |
| PE Ratio | 10.47 |
Champion Iron is an Australian iron ore company that is listed on the TSX as well as the ASX in Australia. This company was established in 2006 and is headquartered in New South Wales, Australia.
It is more of a traditional iron ore company that mines and produces the material. In the most recent quarter, Champion Iron produced 3.447 million WMT of iron ore and had a 77.8% ore recovery rate.
The company recently brought in a semi-annual dividend for shareholders in 2022. Since then, each distribution has been for $0.10 per share.
3. Black Iron Inc
Here are some key facts for this stock:
| Ticker Symbol | TSE: BKI |
| Market Cap | $15.206 million |
| 52-Week trading range | $0.05 to $0.10 |
| Dividend Yield | N/A |
| PE Ratio | N/A |
Black Iron Inc. is the smallest iron ore company on this list. It was founded in 2010 and is also headquartered in Toronto. The company operates a 100% owned iron ore project in Ukraine and focuses its production on meeting the demand for green steel.
Its iron ore is highly sought after as it has a relatively high iron content (68%) and a low impurity. Green steel is the critical component of building sustainable energy infrastructure, which is what Black Iron is focused on. Black Iron estimates that its current project will be valued as a $1.7 billion asset in the future.
4. Rio Tinto ADR plc
Here are some key facts for this stock:
| Ticker Symbol | NYSE: RIO |
| Market Cap | $103.307 billion |
| 52-Week trading range | $58.27 – $75.09 |
| Dividend Yield | 6.87% |
| PE Ratio | 10.22 |
The Rio Tinto Group is a British-Australian multinational mining company that has global operations and is headquartered in Melbourne and London. The stock is listed in Australia, New York, and London. It is also a component of the FTSE 100 and the S&P/ASX indexes.
Rio Tinto operates 17 iron ore mines in the Pilbara region of Western Australia. Its Pilbara blend of iron ore is the most recognized blend of iron ore in the world and is widely known as the US dollar of iron ore. RIO pays a 6.87% dividend yield that is paid semi-annually to shareholders.
5. BHP Group Limited
Here are some key details for this stock:
| Ticker Symbol | NYSE: BHP |
| Market Cap | $146.247 billion |
| 52-Week trading range | $54.28 – $69.11 |
| Dividend Yield | 5.28% |
| PE Ratio | 19.78 |
BHP Group Limited is one of the largest mining companies in the world and is also based out of Australia. The Broken Hill Proprietary Company was first established in 1885 and remains one of the largest companies in Australia by market capitalization.
The company owns five iron ore mines and four processing plants in the Pilbara region of Western Australia, as well as a project in Brazil. BHP pays out a 5.28% dividend yield paid to shareholders semi-annually.
How To Buy Iron Ore Stocks in Canada
All of the iron ore stocks on our list are available to buy on any Canadian brokerage. If you’re considering buying Canadian iron ore stocks, consider using a Canadian discount brokerage like Wealthsimple or Questrade to save on commission fees. You enjoy all the features of a big bank brokerage at a fraction of the cost.
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Iron Ore Stocks Explained
Iron ore stocks are companies that operate in some capacity in the industry. This can be through mining, processing, or, in the case of a company like Labrador Iron Ore, through royalties.
Iron ore stocks are essential to the global economy because of the importance of iron ore in producing steel. This makes them relatively safe stocks, and the price is usually determined by the market price of iron ore futures.
Are Iron Ore Stocks a Good Investment?
Iron ore stocks are typically seen as a good investment because of the importance of steel to the global economy. Since there are so few Canadian iron ore stocks to consider, this makes choosing which ones to invest in an easier task.
When investing in mining and metals companies, one should consider the number of projects and mines that are currently active. Another thing to look for is rising revenues and production growth from quarter to quarter.
Finally, considering there isn’t much price appreciation in the stock price, choosing iron ore stocks with a strong dividend yield and a history of dividend growth can be a good strategy.
Downsides of Iron Ore Stocks
The downsides of iron ore stocks are similar to investing in any metals or commodities. These are value stocks that see very little price appreciation or depreciation. This makes them stable investments, although investors seeking higher growth investments will want to look elsewhere.
Iron ore stocks are also dictated by the price of iron ore futures. This is the same as investing in gold or oil stocks. Luckily, iron ore will always be in demand due to its importance in steel production.
There Are Also Iron Ore ETFs
There isn’t an ETF dedicated explicitly to iron ore stocks that trades in Canada or the US. You can get exposure to iron ore stock through mining and metals ETFs. Some examples include:
- iShares MSCI Global Metals and Mining Producers ETF (BATS: PICK)
The top two holdings in this ETF by weighted allocation are BHP Group and Rio Tinto, and it also holds Labrador Iron Ore.
Methodology
Since there isn’t a long list of Canadian iron ore stocks, it was straightforward to compile this list. Labrador is the obvious choice as the largest Canadian iron ore company. With BHP Group and Rio Tinto, we wanted to include global iron ore powerhouses with strong project growth and generous dividends. These are important factors to consider when choosing iron ore stocks to buy in Canada.
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