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FCX vs. SCCO: Which Copper Mining Stock Is Worth Betting on Now?
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Key Takeaways
FCX boosts growth with major expansions, new smelter projects and strong cash generation.
SCCO advances $15B in projects, including Michiquillay and Los Chancas in Peru.
Both companies balance dividends, cash flow and investments amid market volatility.
Freeport-McMoRan Inc. (FCX - Free Report) and Southern Copper Corporation (SCCO - Free Report) are two heavyweights in the copper mining industry. Both operate on a global scale, extracting and processing copper and other metals. Also, both are navigating challenges such as fluctuating copper prices and global economic uncertainties. Given the current uncertainties surrounding the trade tensions and their potential impact on copper prices, analyzing these companies' fundamentals is timely and pertinent.
Copper prices remained volatile this year amid global economic and trade uncertainties. After racking up solid gains in late March, copper prices slipped to around $4.1 per pound in early April amid demand worries due to tariffs, which threatened to cause a broader slowdown globally.
However, prices of the red metal moved up in late April to roughly $4.9 per pound amid a weakening U.S. dollar on heightened concerns about the prospect of a downturn in the U.S. economy. Prices again retreated to around $4.7 per pound in late May on weak global demand and increased supply. Prices recovered in June to close the second quarter above the $5 per pound level, leading to a roughly 25% gain in the first six months of 2025.
However, prices have again retreated to below $4.5 per pound lately amid increased supply. Weaker global manufacturing activities pose risks to copper demand. Copper demand is also likely to remain under pressure due to tariffs.
Let’s dive deep and closely compare the fundamentals of these two copper mining giants to determine which one is a better investment now.
The Case for Freeport
Freeport is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It is evaluating a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde.
FCX is also conducting pre-feasibility studies (expected to be completed in 2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.
Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with the start-up commencing in the second quarter of 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted commencement of production by 2030. Gold production also commenced at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.
FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $2.2 billion in the second quarter of 2025. It has distributed $5.2 billion to its shareholders through dividends and share purchases since June 30, 2021. Freeport ended the second quarter with strong liquidity, including $4.5 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the second quarter, Freeport had a net debt of $1.5 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027.
FCX offers a dividend yield of roughly 0.7% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 19.4%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Despite these positives, Freeport faces headwinds from higher costs. FCX saw a notable reduction in its average unit net cash cost per pound of copper in the second quarter to just $1.13 from $1.73 a year earlier and well below its guidance of $1.50. The decline was fueled by operational efficiencies, higher gold credits and an uptick in copper sales volumes.
Freeport's outlook for the third quarter, however, suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $1.59 per pound, while still projecting a full-year average of roughly $1.55. Lower expected sales volumes are likely to impact costs in the quarter. The potential impacts of tariffs may lead to further upside to the projected costs. FCX estimates that the tariffs could potentially increase the cost of goods it purchases in the United States by roughly 5%. Higher costs are likely to weigh on the company's margins.
The Case for Southern Copper
Southern Copper has a strong pipeline of world-class copper greenfield projects and various other promising opportunities. The company’s capital investment program for this decade is more than $15 billion. This includes investments in El Pilar and El Arco projects in Mexico and the Tia Maria, Los Chancas and Michiquillay projects in Peru. This forecast also includes several infrastructure investments, including key investments to bolster the competitiveness of the El Arco project.
The company continues to build its presence in Peru as the country is the second-largest producer of copper. Peru holds about 9% of the world’s copper reserves. Southern Copper’s Michiquillay is expected to become one of Peru's largest copper mines and will produce 225,000 tons of copper per year (along with by-products of molybdenum, gold and silver) for an expected mine life of more than 25 years. Production is expected to start by 2032. The Los Chancas – Apurimac project is an open-pit mine with a combined operation of concentrator and SX-EW processes with an annual production capacity of 130,000 tons of copper and 7,500 tons of molybdenum. The project is expected to commence operations in 2030-2031.
SCCO generated net cash from operating activities of $4.42 billion in 2024, up roughly 24% from $3.57 billion in 2023, attributable to higher net income. Cash flow from operating activities rose roughly 5% year over year to roughly $1.7 billion in the first half of 2025, driven by strong cash generation in its operations. SCCO offers a dividend yield of 3.3% at the current stock price. Its payout ratio is 61%, with a five-year annualized dividend growth rate of roughly 4.4%.
On the flip side, lower copper production is a concern for Southern Copper. Its copper production fell 1.4% in the second quarter, mainly reflecting lower production in Mexico. The decline in Mexico was due to lower production Buenavista and La Caridad mines. Production from SCCO’s operations in Peru also saw a modest decline.
Southern Copper targets copper production of 965,300 tons for 2025, in sync with its plans, but down 0.9% year over year. Copper production from Buenavista is expected to decline this year due to the company’s decision to produce only zinc from the Buenavista zinc concentrator.
Price Performance and Valuation of FCX & SCCO
Year to date, FCX stock has gained 16.5%, while SCCO stock has increased 6.1% compared with the Zacks Mining - Non Ferrous industry’s rise of 5.3%.
Image Source: Zacks Investment Research
FCX is currently trading at a forward 12-month earnings multiple of 20.87, higher than its five-year median. This represents a roughly 5.9% premium when stacked up with the industry average of 19.71X.
Image Source: Zacks Investment Research
SCCO is currently trading at a forward 12-month earnings multiple of 20.75, modestly higher than its five-year median and above the industry.
Image Source: Zacks Investment Research
How Does Zacks Consensus Estimate Compare for FCX & SCCO?
The Zacks Consensus Estimate for FCX’s 2025 sales and EPS implies a year-over-year rise of 6.7% and 18.2%, respectively. The EPS estimates for 2025 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
The consensus estimate for SCCO’s 2025 sales and EPS implies year-over-year growth of 6.4% and 8.6%, respectively. The EPS estimates for 2025 have been stable over the past 60 days.
Both Freeport and Southern Copper present compelling investment cases. FCX is poised to gain from progress in expansion activities that will boost production capacity. Robust financial health allows FCX to invest in growth projects and drive shareholder value. On the other hand, SCCO is well-positioned to deliver enhanced performance, backed by its constant commitment to increasing low-cost production and growth investments. Leveraging its substantial cash generation capacity, Southern Copper remains committed to returning value to its shareholders while prioritizing the development of projects to uphold its reputation as a low-cost copper producer. FCX appears to have a slight edge over SCCO due to its higher dividend growth rate. In addition, FCX's higher earnings growth projections suggest that it may offer better investment prospects in the current market environment.
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FCX vs. SCCO: Which Copper Mining Stock Is Worth Betting on Now?
Key Takeaways
Freeport-McMoRan Inc. (FCX - Free Report) and Southern Copper Corporation (SCCO - Free Report) are two heavyweights in the copper mining industry. Both operate on a global scale, extracting and processing copper and other metals. Also, both are navigating challenges such as fluctuating copper prices and global economic uncertainties. Given the current uncertainties surrounding the trade tensions and their potential impact on copper prices, analyzing these companies' fundamentals is timely and pertinent.
Copper prices remained volatile this year amid global economic and trade uncertainties. After racking up solid gains in late March, copper prices slipped to around $4.1 per pound in early April amid demand worries due to tariffs, which threatened to cause a broader slowdown globally.
However, prices of the red metal moved up in late April to roughly $4.9 per pound amid a weakening U.S. dollar on heightened concerns about the prospect of a downturn in the U.S. economy. Prices again retreated to around $4.7 per pound in late May on weak global demand and increased supply. Prices recovered in June to close the second quarter above the $5 per pound level, leading to a roughly 25% gain in the first six months of 2025.
However, prices have again retreated to below $4.5 per pound lately amid increased supply. Weaker global manufacturing activities pose risks to copper demand. Copper demand is also likely to remain under pressure due to tariffs.
Let’s dive deep and closely compare the fundamentals of these two copper mining giants to determine which one is a better investment now.
The Case for Freeport
Freeport is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It is evaluating a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde.
FCX is also conducting pre-feasibility studies (expected to be completed in 2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.
Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with the start-up commencing in the second quarter of 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted commencement of production by 2030. Gold production also commenced at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.
FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $2.2 billion in the second quarter of 2025. It has distributed $5.2 billion to its shareholders through dividends and share purchases since June 30, 2021. Freeport ended the second quarter with strong liquidity, including $4.5 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the second quarter, Freeport had a net debt of $1.5 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027.
FCX offers a dividend yield of roughly 0.7% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 19.4%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Despite these positives, Freeport faces headwinds from higher costs. FCX saw a notable reduction in its average unit net cash cost per pound of copper in the second quarter to just $1.13 from $1.73 a year earlier and well below its guidance of $1.50. The decline was fueled by operational efficiencies, higher gold credits and an uptick in copper sales volumes.
Freeport's outlook for the third quarter, however, suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $1.59 per pound, while still projecting a full-year average of roughly $1.55. Lower expected sales volumes are likely to impact costs in the quarter. The potential impacts of tariffs may lead to further upside to the projected costs. FCX estimates that the tariffs could potentially increase the cost of goods it purchases in the United States by roughly 5%. Higher costs are likely to weigh on the company's margins.
The Case for Southern Copper
Southern Copper has a strong pipeline of world-class copper greenfield projects and various other promising opportunities. The company’s capital investment program for this decade is more than $15 billion. This includes investments in El Pilar and El Arco projects in Mexico and the Tia Maria, Los Chancas and Michiquillay projects in Peru. This forecast also includes several infrastructure investments, including key investments to bolster the competitiveness of the El Arco project.
The company continues to build its presence in Peru as the country is the second-largest producer of copper. Peru holds about 9% of the world’s copper reserves. Southern Copper’s Michiquillay is expected to become one of Peru's largest copper mines and will produce 225,000 tons of copper per year (along with by-products of molybdenum, gold and silver) for an expected mine life of more than 25 years. Production is expected to start by 2032. The Los Chancas – Apurimac project is an open-pit mine with a combined operation of concentrator and SX-EW processes with an annual production capacity of 130,000 tons of copper and 7,500 tons of molybdenum. The project is expected to commence operations in 2030-2031.
SCCO generated net cash from operating activities of $4.42 billion in 2024, up roughly 24% from $3.57 billion in 2023, attributable to higher net income. Cash flow from operating activities rose roughly 5% year over year to roughly $1.7 billion in the first half of 2025, driven by strong cash generation in its operations. SCCO offers a dividend yield of 3.3% at the current stock price. Its payout ratio is 61%, with a five-year annualized dividend growth rate of roughly 4.4%.
On the flip side, lower copper production is a concern for Southern Copper. Its copper production fell 1.4% in the second quarter, mainly reflecting lower production in Mexico. The decline in Mexico was due to lower production Buenavista and La Caridad mines. Production from SCCO’s operations in Peru also saw a modest decline.
Southern Copper targets copper production of 965,300 tons for 2025, in sync with its plans, but down 0.9% year over year. Copper production from Buenavista is expected to decline this year due to the company’s decision to produce only zinc from the Buenavista zinc concentrator.
Price Performance and Valuation of FCX & SCCO
Year to date, FCX stock has gained 16.5%, while SCCO stock has increased 6.1% compared with the Zacks Mining - Non Ferrous industry’s rise of 5.3%.
FCX is currently trading at a forward 12-month earnings multiple of 20.87, higher than its five-year median. This represents a roughly 5.9% premium when stacked up with the industry average of 19.71X.
SCCO is currently trading at a forward 12-month earnings multiple of 20.75, modestly higher than its five-year median and above the industry.
How Does Zacks Consensus Estimate Compare for FCX & SCCO?
The Zacks Consensus Estimate for FCX’s 2025 sales and EPS implies a year-over-year rise of 6.7% and 18.2%, respectively. The EPS estimates for 2025 have been trending higher over the past 60 days.
The consensus estimate for SCCO’s 2025 sales and EPS implies year-over-year growth of 6.4% and 8.6%, respectively. The EPS estimates for 2025 have been stable over the past 60 days.
FCX or SCCO: Which Is a Better Pick?
Both FCX and SCCO currently have a Zacks Rank #3 (Hold), so picking one stock is not easy. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Freeport and Southern Copper present compelling investment cases. FCX is poised to gain from progress in expansion activities that will boost production capacity. Robust financial health allows FCX to invest in growth projects and drive shareholder value. On the other hand, SCCO is well-positioned to deliver enhanced performance, backed by its constant commitment to increasing low-cost production and growth investments. Leveraging its substantial cash generation capacity, Southern Copper remains committed to returning value to its shareholders while prioritizing the development of projects to uphold its reputation as a low-cost copper producer. FCX appears to have a slight edge over SCCO due to its higher dividend growth rate. In addition, FCX's higher earnings growth projections suggest that it may offer better investment prospects in the current market environment.