If there’s one stone that Americans can’t get enough of, it’s the diamond. In fact, in 2019 alone, Americans spent $20.2 billion on diamonds. Even more surprising is that this is just 19.2% of the global market share. Diamonds make for more than just beautiful jewelry, however. In fact, about 46% of diamonds used are for industrial purposes like cutting, drilling, and grinding. The best diamond stocks are involved in more than one industry.
The idealized, gem-quality polished minerals that we see for wedding proposals only make up about 19% of the diamond market. 2020 was a slow year for the diamond market. This could have been a result of reduced demand for expensive products with the economic downturn. The pandemic also affected China’s diamond production (which accounts for 15% of global diamond demand).
Despite the difficult year the diamond market has had, there’s plenty of potential for it to come back strong in the future. Investors interested in cashing in on this future bullish market will want to invest sooner than later. In this article, we’ll talk about the best diamond stocks to invest in to build your portfolio.
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Best Diamond Stocks To Buy
Rio Tinto Limited (OTCMKTS:RTNTF)
Rio Tinto Group is the world’s second-largest mining and metals corporation. Founded in 1973, this Anglo-Australian multinational corporation is headquartered in London. Rio Tinto’s main products include diamonds, iron ore, copper, uranium, and gold. Much of the company’s growth over the years has been as a result of mergers and acquisitions. The company focuses mainly on extracting minerals, however, they’re involved in refining as well.
Additionally, Rio Tinto sells shares on three major exchanges: the London Stock Exchange, Australian Securities Exchange, and American Depository shares are traded on the NYSE. Their stock took a massive dip back in March of 2020, but by summer had completely recovered. The company’s share price is currently the highest it’s ever been, at $88.67 per share.
Alrosa is one of the largest mining companies in Russia, and in the world in general. The company specializes in the mining, manufacturing, exploration, and sale of diamonds. By volume, Alrosa leads the rest of the globe in terms of diamond production.
In Russia, Alrosa produces 95% of the country’s diamond supply. Worldwide, the company accounts for 27% of the earth’s diamond extraction. Altogether, this massive company has a market cap of $753.58 billion. Right now, their shares trade for just over $100 apiece. Some analysts think this stock may be overvalued, so investors should wait for a dip in price before buying.
Long Term Diamond Company Stocks
Signet Jewelers Ltd. (NYSE:SIG)
Signet is based in Ohio and is known as the world’s largest retailer of diamond jewelry. Signet was founded in 1949 and has grown over the years through a number of mergers and acquisitions. Today, the company has a market cap of $2.27 billion.
Some of the well-known companies that Signet Jewelers owns and operates include Jared, Zales, Kay Jewelers, and more. The company operates nearly 3,000 store locations across the US, Canada, UK, Republic of Ireland, and the Channel Islands. They own some of the most iconic brands in the industry, and their portfolio is incredibly diverse as well.
Signet hit its peak price in 2015 and has since decreased in value substantially. That said, in the summer of 2020, Signet stock began an upward trajectory that seems as though it may be a big turn around for the company. Investors who buy now could be in for significant returns in the coming years, but shouldn’t wait long.
Anglo American plc (OTCMKTS:NGLOY)
Anglo American mines and processes a number of materials including diamonds, as well as a number of base and precious metals such as platinum, copper, nickel, and more. Based out of England, Anglo American is notably the world’s largest platinum producer, accounting for 40% of the world’s output.
Regionally, Anglo American has operations on six continents. The company is also the 274th largest company in the world. They have a market cap of $46.67 billion. Anglo’s stock is quite volatile in nature, with several peaks and valleys over the last decade. Anglo performed well in 2020. Investors expect this momentum to carry over in the coming months.
Diamond Penny Stocks
Petra Diamonds Limited (LON:PLD)
Based in Jersey,UK, Petra is a diamond mining company. The group holds an interest in eight different mines throughout Tanzania and South Africa. The company used to be much more focused on exploration but has since shifted to a focus on mining. Since the transition, Petra has become one of the largest independent African diamond producers.
As a matter of comparison, in the year 2012, Petra owned 5 of the mines known to produce the most diamonds in the world. This includes the famous “Cullinan Diamond Mine” which became famous for its production of the world’s largest rough and polished diamond.
Petra has seen volatile market performance over the years, peaking in 2014. The company now trades for its lowest price in history on the London Stock Exchange at $1.64 per share. They also have the smallest market cap of any company on our list at $14.19 million. Investors can slip in at the bottom level right now for potential awesome returns in the future.
Mountain Province Diamond (OTC:MPVDF)
Headquartered in Canada, Mountain Province is another one of the most volatile diamond mining companies on our list. The company is a major partner with De Beers in the Gacho Kue Diamond Mine Project. Gacho Kue is the world’s richest and newest diamond mine, with an estimated reserve of 80 million carats.
Mountain Province saw its best market performance from 2009-2017. Afterward, share prices plummeted and were made worse through the Covid-19 pandemic. When looking at the data, it appears that Mountain Province reached a low point during the pandemic and is now recovering. With the diamond market expected to make an epic comeback, Mountain Province could be a large player. Now could be a great time to get in on the ground floor of this company.
Should I Buy Diamond Stocks?
One thing we know for sure is that the stock market is cyclical. Even before the COVID-19 crash in March 2020, the diamond market was down. Experts believe this industry is due for an upswing sometime in the near future. The most recent performance of many of these stocks suggests that it may have already begun.
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Diamond Stocks Article Review: Final Thoughts
Many of us have a romanticized notion of gifting diamonds to the important people in our lives. They are also essential for many industrial applications. Diamonds don’t always perform well during economic downturns, because consumers are focused on saving their money for essentials. However, when the market recovers, consumers will have extra buying power to make these big purchases. Add some of these diamond stocks to your portfolio today, before these stocks get more expensive.