Alumina’s share price has increased 16.22% year-to-date and it appears the stock could climb even further, buoyed by record-high alumina prices. The price increases are largely driven by supply-side factors, with two of the world’s largest alumina refineries in Alunorte (Brazil) and Xinfa (China) currently running at reduced production capacities.
With no new announcements from the Aussie miner, it would appear that today’s news is largely driven by the continued price rise for the metal as US sanctions have pushed Australian prices to all-time highs.
One of the world’s major aluminium smelters, Alba, posted a Q4 net loss in Qatar on Friday due to the high price of alumina as a core input, and this may indicate greater than expected profitability come its 21 February reporting date.
The share price has slowly been on the rise since December 2018, and at a P/E valuation of around 10, I think there’s potential to go even higher with a strong earnings result. I personally chose Alumina as my top dividend stock for February due to the strong technical environment and juicy, fully-franked 9.60% dividend yield on offer at the moment.
Monday was a generally strong day for the ASX200 miners, with gold miner Northern Star Resources Ltd (ASX: NST) closing 4.26% higher at $8.81 per share, whilst the big boys BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) closed 1.80% and 2.01% higher, respectively.
Alumina has continued to provide investors with both capital appreciation and income in the early part of the year. Personally, while the technical environment remains supportive throughout 1H19, I’d be leaning more towards capital stability stocks such as Wesfarmers Ltd (ASX: WES) or AGL Energy Limited (ASX: AGL) in the short-term.
Our top dividend stock pick for 2019 currently boasts a 5.4% dividend yield (fully franked). I believe it’s a perfect fit for a well-diversified, income-focused portfolio.
Even better, this yield comes attached to an attractive and still-growing business which could keep expanding throughout Australia and New Zealand for years to come. With disciplined management and a long track record of building wealth for shareholders, this company is a serious candidate for any income-minded investor’s portfolio.
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Motley Fool contributor Lachlan Hall does not own shares in any of the companies mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.