This high-value metal is tricky to source and in high demand — especially from car manufacturers. But with a history of volatility and the electric vehicle market booming, there’s no guarantee it will continue to hold its value.
Palladium is a bright, silver-white metal primarily mined in Russia and South Africa. It’s typically produced as a byproduct of mining other materials, like nickel and platinum. It is one of the six platinum-group metals, a group that includes iridium, osmium, platinum, rhodium and ruthenium.
We’re most likely to encounter palladium when driving a vehicle, as nearly 85% of mined palladium finds itself in the exhaust systems of cars. It’s a vital component of the catalytic converters responsible for transforming toxic pollutants into carbon dioxide, nitrogen and water vapor. Palladium is also used in dentistry, electronics, medicine and jewelry manufacturing.
Palladium stocks are stocks from companies that produce palladium — mining companies, mostly. Unfortunately, there are few pure-play palladium stocks, as this metal is typically produced as the mining byproduct of other materials, like platinum.
Why invest in palladium stocks?
Palladium is 30 times rarer than gold and as demand for this material continues to rise, so do its prices.
The cost of palladium has been on the rise since 2016, hitting an astonishing high of $2,714 per ounce in February 2020. For comparison, gold was trading at $1,575.95 per ounce at that time.
Why is palladium on the rise? In short: demand. Anytime the demand for a commodity outpaces its supply, the price of that commodity rises. And palladium supplies have been unable to meet global demand since 2012.
And the good news for investors is that the demand for this metal looks like it will continue its upward trajectory. With our heavy reliance on palladium in catalytic converters and rising global pressure to ditch high-emission vehicles, car markers need more palladium than ever. And since the metal isn’t easily replaced, palladium demand is high.
The bottom line? Palladium is valuable, and trends in global demand for this metal are poised to drive its value higher still.
Risks of investing in palladium
Despite palladium’s rising price tag, this commodity hasn’t always been such a hot commodity. In fact, the metal has a history of volatility and is only valuable so long as it’s needed.
While car manufacturers have yet to find a palladium workaround, a replacement isn’t exactly out of the question. And with palladium being so rare and cumbersome to produce, it’s quite possible that an alternative could be found — especially given the failure of palladium miners to meet increasing global demand.
Another threat to consider is the rising popularity of electric vehicles. The electric vehicle market is growing — fast. And this could act as a significant market disruptor for palladium since electric vehicles don’t require catalytic converters.
Palladium stocks
There are few pure-play palladium stocks, as most of the palladium that’s manufactured is produced as a byproduct of other metals. So if you plan to invest in this commodity, prepare to back mining companies that produce other materials too, like platinum.
Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.
Company summary
Canadian Palladium Resources Inc. engages in the acquisition and exploration of resource properties in North America and Europe. The company holds 100% interest in the East Bull PGM Property that comprise 992 hectares located in the Gerow Township, Ontario, Canada; and Tisová and TGER cobalt-copper properties located in Europe. The company was formerly known as 21C Metals Inc. and changed its name to Canadian Palladium Resources Inc. in January 2020. Canadian Palladium Resources Inc. was incorporated in 2005 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $16175200
Dividend yield: N/A%
Company summary
Eastern Platinum Limited, together with its subsidiaries, engages in the mining, exploration, and development of platinum group metal (PGM) and chrome properties in South Africa. Its PGM deposits include platinum, palladium, rhodium, osmium, iridium, and ruthenium. The company principally holds a 87.5% interest in the Crocodile River Mine located on the western limb and the Kennedy's Vale project on the eastern limb of Bushveld Complex; a 87% interest in the Mareesburg project situated on the eastern limb of the Bushveld Complex; and a 93.4% interest in the Spitzkop project located on the eastern limb of the Bushveld Complex. Eastern Platinum Limited was founded in 1989 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $38227620
P/E ratio: 153.5841
PEG ratio: 0
Dividend yield: 0%
Company summary
Grid Metals Corp. engages in exploring and developing base and precious metal mineral properties in Canada. It explores for nickel, copper, cobalt, lithium and rare metals, and platinum group metals. It focuses on the East Bull Lake Palladium Property located in Ontario. The company was formerly known as Mustang Minerals Corp. and changed its name to Grid Metals Corp. in June 2018. Grid Metals Corp. was incorporated in 1997 and is headquartered in Toronto, Canada.
Historical performance
Stock information
Market capitalization: $4769954
Dividend yield: 0%
Company summary
Impala Platinum Holdings Limited engages in mining, processing, refining, and marketing platinum group metals (PGMs) in South Africa and Zimbabwe. The company produces platinum, palladium, and rhodium, as well as chrome and nickel ores. It has operations on the PGM-bearing ore bodies, including the Bushveld Complex located in South Africa; and the Great Dyke situated in Zimbabwe. The company also owns and operates the Lac des Iles Mine located northwest of Thunder Bay, Ontario, Canada. In addition, it owns interest in two exploration properties, including the Sunday Lake project and the Shebandowan project in Canada. Impala Platinum Holdings Limited is headquartered in Illovo, South Africa.
Historical performance
Stock information
Market capitalization: $116690870272
P/E ratio: 8.6557
Dividend yield: 0.0317%
Company summary
Ivanhoe Mines Ltd. engages in the exploration, development, and recovery of minerals and precious metals located primarily in Africa. It explores for platinum, palladium, nickel, copper, gold, rhodium, zinc, germanium, and lead deposits. The company's projects include the Platreef project located in the Northern Limb of South Africa's Bushveld Complex; the Kipushi project located on the DRC's Copperbelt; and the Kamoa-Kakula project located within the Central African Copperbelt. It also holds a 100% interest in the Western Foreland exploration project covering an area of approximately 2,550 square kilometers located in the Democratic Republic of Congo. It has a strategic partnership agreement with China Nonferrous Metal Mining (Group) Co., Ltd. to examine exploration, development, and acquisition of mineral projects, as well as production, smelting, and logistics opportunities in Africa. The company was formerly known as Ivanplats Limited and changed its name to Ivanhoe Mines Ltd. in August 2013. Ivanhoe Mines Ltd. was incorporated in 1993 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $5320972800
P/E ratio: 46.3667
PEG ratio: 0
Dividend yield: 0%
Company summary
New Age Metals Inc., a mineral exploration company, acquires, explores for, and develops platinum group metals (PGMs), and precious and base metal properties in Canada. It holds interests in the River Valley PGE project located in the Dana and Pardo townships of Northern Ontario; the Genesis PGE/polymetallic project located in south central Alaska; and eight lithium projects situated to the northeast of Winnipeg, Manitoba. The company was formerly known as Pacific North West Capital Corp. and changed its name to New Age Metals Inc. in February 2017. New Age Metals Inc. was incorporated in 1996 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $7966583
Dividend yield: 0%
Company summary
Palladium One Mining Inc. explores for and develops mineral resource properties. The company primarily explores for palladium, platinum, gold, copper, cobalt, and nickel. The company holds a 100% interest in its flagship property, the Lantinen Koillismaa project comprising an area of approximately 12,416 hectares located in north-central Finland. It also holds interests in the Kostonjarvi property covering an area of approximately 20,000-hectare situated in central Finland; and the Tyko property comprising an area of approximately 2,620 hectares located in Ontario, Canada. The company was formerly known as Nickel One Resources Inc. and changed its name to Palladium One Mining Inc. in May 2019. Palladium One Mining Inc. is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $17028496
Dividend yield: N/A%
Company summary
Platinum Group Metals Ltd. engages in the acquisition, exploration, and development of platinum and palladium properties. It explores for platinum, palladium, rhodium, gold, ruthenium, iridium, copper, and nickel deposits. The company holds 50.02% interest in the Waterberg project located on the North Limb of the Western Bushveld complex, South Africa. Platinum Group Metals Ltd. was founded in 2000 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $189667280
PEG ratio: 0
Dividend yield: 0%
Company summary
Sibanye Stillwater Limited operates as a precious metals mining company in South Africa, the United States, Zimbabwe, Canada, and Argentina. The company produces gold; platinum group metals (PGMs), including palladium, platinum, and rhodium projects; and by-products, such as iridium, ruthenium, nickel, copper, and chrome. It owns the East Boulder and Stillwater mines located in Montana, the United States; and Columbus metallurgical complex, which smelts the material mined to produce PGM-rich filter cake, as well as conducts PGM recycling activities. The company is also involved in the Kroondal, Rustenburg, Marikana, and Platinum Mile operations situated in South Africa; Mimosa located on the southern portion of the Great Dyke in Zimbabwe; the Driefontein, Kloof, and Cooke surface operations located on the West Rand of the Witwatersrand Basin; and the Beatrix situated in the southern Free State. In addition, it owns an interest in surface tailings retreatment facilities; the Marathon PGM project in Ontario, Canada; the Altar and Rio Grande copper gold projects in the Andes in north-west Argentina; the Hoedspruit, Zondernaam, and Vygenhoek PGM projects in South Africa; and the Burnstone and southern Free State gold projects in South Africa. Sibanye Gold Limited was incorporated in 2002 and is headquartered in Weltevreden Park, South Africa.
Historical performance
Stock information
Market capitalization: $9511894016
P/E ratio: 3.7739
Dividend yield: 0.0181%
Company summary
Sienna Resources Inc. engages in the identification, acquisition, and exploration of mineral properties in Canada, Sweden, and the United States. The company primarily explores for platinum, palladium, nickel, copper, cobalt, and lithium deposits. Its flagship property is Slättberg project located in southern Sweden. The company was formerly known as Habanero Resources Inc. and changed its name to Sienna Resources Inc. in January 2014. Sienna Resources Inc. was incorporated in 1983 and is headquartered in Vancouver, Canada.
Historical performance
Stock information
Market capitalization: $7618730
Dividend yield: 0%
What ETFs track the palladium category?
Of the three ETFs that contain palladium exposure, the Aberdeen Standard Physical Palladium Shares ETF (PALL) is the closest to a pure-play, as it tracks the performance of palladium with over 130,000 ounces stored in a secured JPMorgan Chase & Co vault in London.
Aberdeen Standard Physical Palladium Shares ETF (PALL)
Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR)
Sprott Physical Platinum and Palladium Trust (SPPP)
Palladium performance
This graph shows the spot price per ounce of palladium.
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Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Bottom line
Palladium plays an important role in the automotive industry as a key component of catalytic converters. But its value could be at risk if a substitute metal were found to take its place.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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