Teck Resources Limited (TCK) is profiting from the rise in commodity prices as it saw record revenue in the fourth quarter of 2009. TCK is trading with a forward P/E of 13.1.
Company Description
Teck Resources mines copper, metallurgical coal and zinc, molybdenum and specialty metals.
The company, headquartered in Canada and one of the largest miners in Canada, owns or has interests in 13 mines in Canada, the US, Chile and Peru. It is also actively exploring in the Americas, Asia/Pacific, Europe and Africa.
Teck Resources Contemplating Reinstating the Dividend
Teck Resources CEO Don Lindsay told Reuters on Mar 31 that its term loan, which it took on to finance the purchase of coal producer Fording in 2008 as the financial crisis took hold, will be gone in the very near term. Earlier this month the loan still totaled $800 million.
This would free up the company to consider reinstating the shareholder dividend, he said.
Teck Saw Record Revenue in Both 2009 and the Fourth Quarter
On Feb 8, Teck Resources reported fourth quarter results and saw record revenue for the quarter of $2.2 billion. The full year was also a record of $7.7 billion.
The company saw record production of copper at Quebrada Blanca and record zinc production at Red Dog and Antamina.
Net earnings for 2009 were the second highest ever at $1.8 billion compared with $659 million in 2008.
The company did miss on the Zacks Consensus Estimate by 12 cents. It has had a spotty record of surprising on estimates over the last 4 quarters but it has beaten 2 out of the last 4 quarters.
Teck Resources is expected to report first quarter results on Apr 20.
Zacks Consensus Estimates Rise
Analysts like what is going on with rising commodity prices and have been pushing up estimates as a result. Copper, for instance, is up sharply in the first three months of the year and has risen 80% in the last year.
The first quarter Zacks Consensus is up 2 cents to 48 cents in just the last 7 days as one estimate has moved higher.
The 2010 Zacks Consensus Estimate has risen 17 cents to $3.51 per share in the last week. One estimate has also moved higher during that time.
Analysts project earnings growth of 140.5% in 2010.
Value Fundamentals
Teck Resources is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.1, which is below the industry average of 2.7. The company also has a stellar 5-year average return on equity (ROE) of 22%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
