Natural Resource Companies Offer Cash Flows Today, not Tomorrow
Dow Jones
Aug 27
0814 GMT - Natural resource companies are offering cash to investors now, unlike some technology companies that rely on profits far into the future, Ninety One's Head of Natural Resources Paul Gooden writes. The average free-cash-flow yield of companies in Ninety One's natural resources portfolio is currently around 8%, he says. This compares with approximately 4% for the broader equity market, he adds. AI, data centers and electrification all rely on natural resources associated with the "old economy," Gooden says. This offers a potentially supportive backdrop for natural resources stocks, he adds. "The future may be digital, but it will still have to be built, powered and mined," he says.
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