S&P/ASX 200 Index (ASX: XJO) stock Orica Ltd (ASX: ORI) is marching higher today.
Shares in the mining and infrastructure solutions provider closed on Friday trading for $21.08. In early afternoon trade on Monday, shares are swapping hands for $21.39 apiece, up 1.5%.
For some context, the ASX 200 is up 0.7% at this same time.
Today's outperformance is par for the course for Orica shares this year, with the ASX 200 stock now up 28.9% in 2025.
And with 473.69 million shares outstanding, Orica commands a market cap of $10.0 billion.
And according to Baker Young's Toby Grimm, Orica shares could keep outpacing the benchmark's returns in the year ahead (courtesy of The Bull).
Should you buy the ASX 200 stock today?
"The world's largest commercial explosives manufacturer recently delivered an encouraging business update," said Grimm, who has a buy recommendation on Orica shares.
As for the first reason the ASX 200 stock is a buy, he said, "It revealed continuing strong demand amid increasing penetration of its digital solutions business. This should help drive higher revenue and earnings growth in full year 2025."
Then there's the surging gold price. Gold is currently trading near all-time highs at US$3,793.70 per ounce. That sees the yellow metal up more than 44% year to date.
"Given record gold prices and growing potential for a rebound in coal, we see demand for Orica's products from key mining customers well supported into 2026," Grimm said.
Which brings us to the third reason you might want to snap up shares in this $10 billion ASX 200 stock today.
According to Grimm:
A strong balance sheet and profit growth should underpin share price upside and leave scope to increase capital returns beyond its dividend yield and $400 million share buy-back program.
Over the past 12 months, Orica has paid 53 cents a share in unfranked dividends, giving the stock a trailing dividend yield of 2.5%.
What's been happening with Orica shares?
As Grimm mentioned up top, the ASX 200 stock released an FY 2026 business update on 5 September, showing continued momentum from FY 2025's strong results.
"The positive momentum from the first half of 2025 has continued into the second half, with all three segments demonstrating profitable growth," Orica CEO Sanjeev Gandhi said on the day.
Gandhi added:
Our core blasting business remains resilient, supported by the ongoing adoption of our innovative products and services, Digital Solutions continues to expand its scale, and Specialty Mining Chemicals has delivered robust earnings despite the extended safety maintenance activities this year at the Winnemucca plant, which are now completed.
Shares in the ASX 200 stock closed up 1.2% on the day.
