Better Buy: Freeport-McMoRan Inc. vs. Barrick Gold

Mining industry titans Freeport-McMoRan (NYSE: FCX) and Barrick Gold (NYSE: ABX) have had their share of troubles over the years. Excessive debt brought on by overzealous expansion during the boom years came back to bite both companies when commodity prices crashed. However, they have worked hard to address their issues by jettisoning non-core assets and reducing costs, which has resulted in significant improvements in both their balance sheets and cash flow. Consequently, each generates gobs of free cash flow these days even though copper and gold prices are nowhere near their former peaks.

That said, while both companies made noticeable progress in their turnaround efforts, the decision to buy one over the other boils down an investor's view on where the price of the main commodity they produce is heading. That's important because while both dig up gold and copper, Freeport-McMoRan is the largest publicly traded producer of the latter while Barrick Gold is the leading miner of the former. Understanding that distinction is crucial because of what appears to be on the horizon in the copper market since Freeport's focus on this market could send its profits and stock price soaring in the coming years.

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Source: Fool.com