Invest in iron -- with a 11% dividend
Commodity stocks are on the rise now as industrial production rebounds, so this top iron dividend stock has a bright future
Today, we saw some powerful industrial production data from all corners of the globe. There was a record monthly rise in industrial output across the 16-nation euro zone in January, with production up 1.7% from December. India's factory output surged 16.7 percent in January from a year earlier -- its fourth month of double-digit expansion. Mexico’s January output was up 3.6%, reversing a severe -10% drop in 2009.
It appears that manufacturing is once again on the rise now that the world economy is on firmer footing. That means commodity companies that stoke the fires of industry -- mainly stocks that deal in iron, copper, coal and oil -- should see growth in the months ahead.
While many stocks in these industries are good buys, a great little stock investors should consider is a Minnesota iron miner with big potential for shares and a whopping 11% dividend.
That iron stock is Mesabi Trust (MSB). Mesabi holds interests in various iron ore properties in the Mesabi Iron Range in Minnesota, including 9,750 contiguous acres in St. Louis County. The company has a market cap of about $275 million, making it small enough to adapt quickly to market conditions and ramp up production fast to capitalize on the economic recovery.
This stock has performed remarkably well in recent months and is up about 400% from its March 2009 low. As industrial demand for iron picks up, MSB should see an even brighter future. With a forward P/E of just 13, the company has a lot of room to grow and should maintain its hefty dividend.
With industrial production on the rise, iron stocks in general are a pretty good investment. But with a hefty 11% yield, this little small-cap gem is also a good find for income-oriented dividend investors, too.
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What does the country have to do with the price-to-earnings ratio of the S&P industrials? From here on in, everything.
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