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Palladium Stocks: The Best Precious Metals Play for 2024? – Energy Investing with Energy and Capital


One of the main advantages of investing in palladium stocks is the potential for strong returns in the coming months. In recent years, palladium has had one wild ride. Palladium has been one of the best-performing commodities, with prices reaching all-time highs in March 2022. Since then, the price has come down some, but lately, palladium is trending up.

Analysts predict that the demand for palladium will outstrip supply in the years ahead. This will drive prices even higher. And the best part? This trend is expected to continue. So what exactly is palladium and which are the best palladium stocks to buy? We’ll be answering these questions and more today. Let’s begin…

Palladium is a rare and valuable metal that is used in a variety of industrial applications, including but not limited to electronics and automotive manufacturing. The demand for palladium stocks is expected to continue growing for years due to the increasing demand for EVs and other green technologies.

Palladium Stocks

As a result, certain palladium stocks present a unique opportunity for investors to profit from this trend. Palladium plays a critical role as a component in automobile catalytic converters, which reduce emissions from combustion engines. With the tightening of global emissions standards, an increase in demand for palladium in catalytic converters is expected.

When it comes to buying palladium stocks, there are several options available to investors. Some investors may choose to invest directly in palladium mining companies. Others may prefer to invest in exchange-traded funds (ETFs) that track the performance of the palladium market. A popular palladium ETF that investors turn to is the Abrdn Physical Palladium Shares ETF (NYSEARCA: PALL). Today, however, we will be more focused on palladium mining stocks. Below, we’ve listed two companies that I believe could experience the most growth in the coming months. 

Palladium Stocks to Buy Now

  • Anglo American Platinum (OTC: ANGPY)
  • Platinum Group Metals Ltd. (NYSEAMERICAN: PLG)

Anglo American Platinum

Anglo American Platinum is a leading global palladium stock specializing in the production of platinum group metals (PGMs). It is headquartered in Johannesburg, South Africa, and is a subsidiary of Anglo American PLC, a diversified mining company. Anglo American Platinum is one of the world’s largest producers of platinum, palladium, and other PGMs. These metals are crucial for various industrial applications, including automotive, jewelry, electronics, and chemical catalysts.

One of Anglo American Platinum’s strengths is its diversified portfolio of PGM assets. With mining and processing operations across Southern Africa, including South Africa, Zimbabwe, and Mozambique, the company enjoys a reliable source of palladium production, mitigating risks associated with single-location operations. Additionally, the company’s extensive reserves and resources of PGMs provide a solid foundation for future production growth.

Another key strength of Anglo American Platinum is its commitment to sustainable mining practices. The company prioritizes safety, health, and environmental management, implementing robust sustainability initiatives to minimize its environmental impact and support the well-being of its workforce and local communities. This commitment to sustainability can be an attractive factor for investors who prioritize environmental, social, and governance (ESG) considerations in their investment decisions.

Furthermore, Anglo American Platinum has a strong track record of financial performance as a palladium stock. The company has a history of generating solid revenues and profits, supported by its competitive PGM production and favorable market conditions. Being one of the leading global producers of platinum and palladium, Anglo American Platinum is well-positioned to capitalize on the increasing demand for these metals. Their critical role in various industrial applications, combined with potential supply constraints due to limited primary PGM production and increasing environmental regulations, presents opportunities for Anglo American Platinum to benefit from the growing demand.

Palladium Stocks - Anglo American

 

Platinum Group Metals Ltd. (NYSEAMERICAN: PLG)

Platinum Group Metals Ltd. is a Canadian-based company that actively explores and develops palladium stock projects. PLG has a primary focus on its flagship Waterberg project in South Africa. This project has the potential to become a significant source of palladium, platinum, rhodium, and gold as it represents one of the largest undeveloped PGM deposits globally.

The key strength of Platinum Group Metals lies in the strategic location and scale of the Waterberg project, located in the Bushveld Complex. The project hosts substantial mineral resources, including high concentrations of palladium and platinum. PLG’s technical team has successfully advanced the Waterberg project through various stages, including exploration, resource delineation, and feasibility studies.

Platinum Group Metals has also secured strategic partnerships with major mining companies, such as Impala Platinum Holdings Limited and Japan Oil, Gas, and Metals National Corporation (JOGMEC), providing technical expertise and financial support for project development. Additionally, PLG holds diversified exploration properties in Canada, including the Maseve mine and the Waterberg extension, offering further potential for future growth in the palladium stock sector.

However, like any investment, there are risks associated with PLG. The mining industry is subject to commodity price volatility, operational risks, regulatory changes, and geopolitical risks, which can impact the financial performance and stock price of the company. As an exploration and development-stage company, PLG may also face challenges in securing financing, obtaining permits, and successfully bringing the Waterberg project into production.

Palladium Stocks - PGM

Pros of Buying Palladium Stocks

Before you invest in any given market, it’s good to weigh the pros and the cons. Because palladium prices are headed upward, it’s easy to note the pros. Some of the positive aspects of investing in palladium mining companies are as follows… 

Palladium’s low correlation with other commodities or stock markets makes it a potential hedge against market volatility and a means of protecting against inflation.

Various industries, especially the automotive sector, drive demand for palladium due to its essential role in catalytic converters for emissions reduction. As global emissions regulations become more stringent, the demand for palladium is expected to remain robust, potentially leading to price appreciation and increased profitability for palladium producers.

Palladium is a rare metal, with limited primary production globally and mostly concentrated in a few countries. This limited supply can create a favorable pricing environment for palladium, potentially leading to higher prices and increased revenue for palladium producers.

Some palladium producers may offer dividend payments to shareholders, providing potential income streams in the form of dividends. This can be attractive to income-oriented investors looking for regular cash flows from their investments.

palladium header

Cons of Buying Palladium Stocks

Now that we’ve covered some of the pros to investing in palladium stocks, let’s go over some cons…

Various factors such as supply-and-demand dynamics, geopolitical events, and global economic conditions can drive fluctuations in palladium prices, making them volatile. Rapid changes in palladium prices can impact the profitability of palladium producers and potentially result in losses for investors.

Investing in individual palladium stocks may pose company-specific risks, such as operational challenges, regulatory changes, and geopolitical risks that can impact the financial performance and stock prices of palladium producers.

Compared with other commodities markets, the palladium market is relatively small and may not be as liquid, posing challenges in buying or selling palladium stocks at desired prices, especially during periods of market volatility.

The performance of palladium stocks is subject to the overall performance of the broader stock market and general economic conditions. Economic downturns or bear markets can negatively impact the performance of palladium stocks, as well as the demand for palladium from end-use industries like the automotive sector.

The Verdict on Palladium Stocks

At the end of the day, palladium stocks look to be a promising bet in the coming years. Investing in palladium stocks presents a unique opportunity for investors to capitalize on the growing demand for palladium in industrial applications. While palladium stocks might not be as popular as gold or silver stocks, they can be just as rewarding. While these two are our favorite palladium stocks, there are others to explore in the market. It’s important to remember that mining companies in general are more volatile than traditional stocks. This is why some people prefer to gain exposure to palladium companies through ETFs.  

But don’t forget to keep an eye out for more options than palladium stocks. 

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