Freeport McMoRan Copper & Gold (FCX)
Background: Freeport-McMoran is engaged in mineral exploration and development, mining and milling of copper, gold, and silver in Indonesia, and the smelting and refining of copper concentrates in Spain and Indonesia. The company was founded in 1987 and trades an average of 20.3 million shares per day with a marketcap of $40 billion.
52-Week Range: $28.85 - $48.96Yield: 3.02% Analysts are in love with this company. Freeport-McMoRan is sporting 16 buy or strong buy from a total of 16 analysts covering the company. The average analyst target price is $50.53. If the analysts are correct, that's about 25% more upside. What is even more appealing is the fat dividend. This miner pays out $1.25 a year, but that amounts to less than one third of profits. Profits are expected to rise, which in turn makes me believe another dividend hike will be followed by another and another. The past doesn't guarantee the future; however the payment history does provided a map. Based on the last five years, the board really enjoys raising the dividend payout. Dividends increased 9.9% on average per year. As long as the payout rate stays in check, the increases are likely to continue. Currently, the short interest based on the float is not a big concern. Short interest is 2.7%. Without a red flag from building short interest, I believe a fair target entry price of near $40.50 is reasonable. After moving up from trading near $36, we don't want to see the shares get too far ahead of the curve right before buying.
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