Investing in diamond stocks | The motley fool

Diamonds embody luxury for many people. They are also one of the most durable materials on earth. But if “diamonds are forever,” what about diamond stocks – those companies involved in everything from mining for gemstones to selling them? With a global diamond jewelry market worth nearly $ 100 billion a year, the stocks involved in the production of these luxury goods are worth a look for investors.

Invest in diamond stocks

Diamonds have been around for a long time and the industry is well established. Investors looking for strong growth should probably move away from this segment of the mining sector in favor of other stocks. In addition, there are many diamond producers that fall under the penny stock category such as Gem Diamonds Limited (OTC: GMDMF) and Petra Diamonds (LON: PDL). Go ahead lightly with stocks that appear to be trading low.

Image source: Getty Images.

However, for investors looking for large, established companies that offer slow but steady growth, a few names dominate the field and are worth a closer look.


Market capitalization

The description

LVMH Moët Hennessy Louis Vuitton (OTC: LVMUY)

$ 412 billion

The world’s largest fashion house conglomerate.

Rio Tinto (NYSE: RIO)

111 billion dollars

One of the main producers of industrial metals and diamonds.

Anglo-American (OTC: NGLOY)

$ 53 billion

Owner of the large diamond company De Beers.

Jewelers Signet rings (NYSE: SIG)

$ 5.8 billion

A great amalgamation of diamond jewelry retailers.

Data source: YCharts. Market capitalization as of November 22, 2021.

1. LVMH Moët Hennessy Louis Vuitton

LVMH Moet Hennessy Louis Vuitton is the world’s largest luxury conglomerate and the owner of a few big names that invoke the essence of haute couture. She is also heavily involved in the manufacturing and retailing of diamonds and jewelry. Brands in the company’s portfolio include iconic names such as Bulgari, Chaumet and TAG Heuer.

To strengthen its presence in high-end jewelry and gemstones, LVMH finalized the acquisition of Tiffany in early 2021. Shortly thereafter, LVMH announced the launch of a joint gemstone and gemstone sustainability initiative. raw materials to help foster positive change in the industry.

LVMH is not a pure game of diamonds. In addition to its brands specializing in jewelry, LVMH shares also offer investors exposure to high-end clothing and accessories, perfumes and cosmetics, champagne, wines and spirits. But if you’re looking for a “fashion house” stock that includes some of the world’s largest diamond companies, LVMH Moet Hennessy Louis Vuitton may be the place to start.

2. Rio Tinto

The British company Rio Tinto is one of the world’s largest producers of raw materials. The mining giant extracts all kinds of products from the earth such as iron ore, aluminum and copper. Its global operation includes a few high-yielding diamond mines that make Rio Tinto one of the largest diamond producers in the world.

Industrial metals are the main source of income for Rio Tinto, and the uses of these materials are growing for manufacturing, technology and other industries. However, demand for Rio Tinto’s products is cyclical, as is often the case for many commodities and mining companies. Despite this, Rio Tinto is one of the largest and most stable metal producers, making it an ideal choice for investors who want ancillary exposure to the diamond industry.

3. Anglo-American

Another prominent mining company, UK-based Anglo American, has global operations that produce platinum, copper, nickel, iron ore and, of course, diamonds. While metals and ore make up the bulk of Anglo American’s sales, it’s actually a great way to play with the diamond industry. Anglo American owns 85% of the diamond company De Beers Group (the company behind the slogan “A diamond is forever”), with the remaining 15% held by the government of the Republic of Botswana.

About a third of the world’s supply of rough diamonds is produced by De Beers and its partners. De Beers also cuts and polishes diamonds and has retail assets that sell finished products to consumers. Along with Anglo American’s base metal production, it is a mining and diamond investment that pays shareholders a semi-annual dividend. It is therefore worth serious consideration for investors interested in generating income.

4. Jewelers Bookmark

Signet Jewelers is one of the world’s largest gemstone jewelry retail operations. Its subsidiaries include Kay, Zales, Jared and more. The company has approximately 2,800 outlets, most of which are located in the United States. Demand for jewelry has skyrocketed in the wake of the COVID-19 pandemic, and Signet’s sales (and stock price) have also jumped.

However, the internet is changing consumption habits and Signet has made a few acquisitions to ensure it remains relevant in the digital age. In 2017, he bought R2Net (parent of to bolster his e-commerce presence, and he acquired jewelry rental startup Rocksbox and small jeweler Diamonds Direct in 2021. It’s unclear how many long will the boom in gemstone sales last. , but Signet Jewelers is a great option to consider in this niche of the retail world.

Diamonds and jewelry are not the fastest growing industry, but these gems hold a special place in the world. Don’t expect hypergrowth by investing in this space, but there are some proven companies involved in the production of diamond jewelry and accessories that deserve the attention of investors.

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