Opinions Dennis da Silva
Labrador Iron Ore RoyaltyLIF.TODON'T BUYJun 04, 2025
Dennis da SilvaStock price when the opinion was issued
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Royalty on iron ore mine, where RIO is the operator. Great company over time. Great dividend yield, pays special dividends. Good holding for a retiree. Pretty steady, good income. He likes energy a bit better for clients, due to volatility in the metals space. Yield is 4.5%.
Likes the mining royalty stocks because you face a lot less risk in mining. Iron ore is important to steel and infrastructure. But technology will challenge the steel sector, of which he is cautiously optimistic. Don't chase this into strength. Buy into correction at $26. The ceiling will be $33 in coming years. Pays a nice yield.
He'd consider owning. People are on the sidelines because iron ore is used to make steel, and tariffs have been slapped on. Tremendous compounder over 2 decades; high teens total shareholder return, mostly from dividends. Dividend is highly variable, though reliable, current yield is ~6.7%. To get a sense of the actual dividend, take a 10-year average, which puts it close to an 8% yield over time.
At 3x book value, trading below 5-year average of 3.4x. Long-life assets, tons of reserves, producing below capacity.
They get a royalty on what's delivered so are tied to iron ore prices. Their dividend is tied to earnings and they just cut the dividend from $1.10 to $0.70 for a yield of 10%. It is an interesting stock because of the valuation - 10X Earnings, cash - $40 million, and exposure, but they need iron ore to get back on track and China to grow again.
Peter HodsonThey have a huge operation in eastern Canada. They have a royalty structure, like a toll road on iron production. With a slowdown in China, how much demand will there be for metals? He's not sure. Be careful. LIF is volatile, but long-term this is good and pays a gooD dividend. You can buy a partial position and average in.
It is in an uptrend and now consolidating. The support level has become the resistance level. It is going sideways so swing traders could trade the swing which is the only way for a stock going sideways. He likes swing trading. Pays a high dividend and there is a reason for a stock having a high dividend.
Has owned shares for a long time. Benefits from iron consumers who prefer substance of assets. Great for dividend investors. Would recommend holding.
Rick Rule
Owns this personally. Earnings and dividends are erratic, depending on the volatile price of iron ore. But once in a while they pay an amazing, special dividend. Pays a 5.6% dividend.
Michael SprungHe likes materials now and this is a materials stock. It's coming off its support level and has made a descending triangle (lower peaks in the past 2 years, but the low has been steady). This could, maybe, breakout. Looks okay. Could benefit if money rotates out of high-flying tech.
Income derived from royalties plus 50% ownership of a mine that's run by RIO, a world-class operator. Difficult Q1; guiding that things will be made up over next 3 quarters, so full-year forecast remains. Dividend is attractive. Issue is trying to make this mine consistent, and a lot of capital's been spent. Market hates inconsistency.