Buy Rare Earth Stocks – 5 Best Rare Earth Stocks To Buy Right Now in 2022

Fact Checked by Gary McFarlane

When you think of rare earth, you may not realize that this element is not so rare as it sounds. In fact, you are surrounded all the time by rare earth: it is in your laptop, television, and even your car if it is electric. Many industrial products use rare earth, too, so it’s not surprising that rare earth stocks are a fine addition to your portfolio. 

So far, China has been the main rare earth producer, but more countries have started to focus on this element. These companies are involved in mining and processing rare earth elements, then sell them to tech products manufacturers. In this guide, we’ve selected the five best rare earth stocks to buy right now and everything else you should know about this industry.

#1 Broker to Buy Stocks – eToro

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How to Buy Stocks – A Quick Guide For 2022

Investing has never been easier. If you are a beginner, check out this step-by-step guide to find out how you can start making money right now:

  • Step 1: Open an Account with eToroOpen eToro’s homepage and click to register, then fill in the form with your personal information.
  • Step 2: Upload Your ID – Next, verify your identity by uploading your ID and proof of address, such as a recent bill dating from the past three months.  
  • Step 3: Deposit Funds – Click on “Deposit” and choose your favorite payment methods to add your capital to your account. 
  • Step 4: Search for Stocks – Next, check eToro’s “Discover” section to find the most profitable stocks.   
  • Step 5: Buy Stocks – Once you’ve located the assets you want to buy, simply click on “Trade” and fill in the order details.

67% of retail investor accounts lose money when trading CFDs with this provider.

Best Rare Earth Stocks to Buy Now – List of the Best Rare Earth Stocks

Rare earth stocks, unlike the actual elements, are quite difficult to find. The main producer is located in China but, fortunately, some other businesses are now focusing on rare earth production. Some of the best rare earth stocks of this year are:

  1. MP Materials – The Best Overall Rare Earth Stock in the United States
  2. Lynas Rare Earths Ltd. – The Best Rare Earth Stock with 150% Share Price Increase
  3. Texas Mineral Resources Corp. – Best Rare Earth Penny Stock
  4. Australian Strategic Materials Ltd. – The Best Rare Earth Stock Under $10
  5. Materion Corporation – The Best Rare Earth Stock for Beginners

How To Buy Stocks – Choose a Broker

You cannot buy rare earth stocks directly from the stock exchange. You need to sign up with a regulated broker that will act as an intermediary. To help you out, we’ve selected the most cost-efficient brokers with a wide range of stocks from varied industries:

  • eToro – Overall Best Place to Buy Stocks
  • AvaTrade – Trade Stocks at 0% Commission

What Are Rare Earth Stocks?

Rare earth elements are nothing new. They have been used for a long time to manufacture tech products, batteries, magnets, chips, and many others. They are crucial for electricity, so they are a core component of electric cars, too. 

Rare earth elements are widely used, but producing them is quite difficult. There are 17 different rare earth elements that you can easily find in the ground, so they are not really “rare”. What makes them inaccessible is the fact that they are deep down inside the earth, and they are fewer and fewer available towards the more accessible earth’s surface. Thus, they are called “rare” simply because they are not easily accessible, despite their abundance.

Rare earth stocks refer to companies that extract and process rare earth elements, including cerium, lanthanum, and neodymium. These are common components of memory chips and mobile phones, among many other gadgets. They are also used in defense and military, aerospace, and many other industries. 

Best Rare Earth Stocks to Buy Now – Full Analysis

In this section, we’ve picked the five best rare earth stocks of this year. We will have a look at their financial performance, stock price performance, and their future potential, providing you with all you need to make an informed investment decision.

1. MP Materials – The Best Overall Rare Earth Stock in the United States

MP Materials is the key rare earth stock in the United States. It owns the only rare earth mine in the U.S., the Mountain Pass Mine in California. As expected, the company is relatively new, being formed in 2017. Despite this, its stock price performance is above average, enticing prospective investors with more than a 40% share price increase over the last year. 

In terms of financial performance, the company pumped up its net income and beat the expectations for revenues and EPS (earnings-per-share) last year. In the future, some voices claim that Biden may impose tariffs on rare earth elements coming from China, which will massively benefit MP Materials as the only rare earth company in the US that owns a mine.

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Lynas Rare Earths Ltd. – The Best Rare Earth Stock with 150% Share Price Increase

If you are looking for nothing less than stellar performance, the Australian company Lynas Rare Earths must go straight to the top of your watchlist. It is one of the biggest rare earth companies outside of China. It currently owns a mine in Australia and it seeks to expand to Malaysia. 

Lynas focuses on extracting and processing neodymium, a rare earth element used to produce magnets. The company expressed its interest in collaborating with other countries, too. It now seeks to become partners with Blue Line Corp, an American company. This project is supported by the Department of Defense in the U.S. and it seeks to build a facility in Texas. If the company continues to make new partnerships and capitalize on its new contract, it could be a very lucrative addition to any portfolio. 

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Texas Mineral Resources Corp. – Best Rare Earth Penny Stock

If you are a patient investor, Texas Mineral Resources may be the stock to reward you for your time and capital. The company is relatively speculative at the moment since the only rare earth mine in the U.S. belongs to MP Materials, but the company has strong plans for 2023. It aims to develop a new rare earth project in collaboration with the USA Rare Earth company. This project will result in an abundant new source of rare earth elements in the U.S., which will further decrease the reliance on China. 

Texas Mineral Resources entered into an agreement with USA Rare Earth, the latter earning about 70% interest after investing $10 million in this project. The results are expected to materialize next year, so this penny stock trading under $3 may be the subject of risky, speculative investing.

67% of retail investor accounts lose money when trading CFDs with this provider.

4. Australian Strategic Materials Ltd. – The Best Rare Earth Stock Under $10

Australian Strategic Materials is another cheap rare earth stock currently trading under $10. This is expected to change once its Australia-based rare earth mine will start extracting the elements. The project is estimated to turn a new rare earth mine operational by 2023. 

Australian Strategic Materials may be a risky bet, but the 72% share price increase in the past year shows strong investor confidence. The company has received numerous accolades for its innovation and sustainability, and it operates in both mining and metal production.

67% of retail investor accounts lose money when trading CFDs with this provider.

5. Materion Corporation – The Best Rare Earth Stock for Beginners

Materion Corporation is relatively more expensive, priced at $90. However, since it is already operational, it poses significantly less risk. As expected, this American company does not directly extract or process rare earth elements. Rather, it uses rare earth materials to create advanced engineering products used in different industries, including energy, semiconductors, defense, auto industry, and many more. 

The company is an essential intermediary actor on the rare earth stage. It has a steady stream of revenues and it is already functional, which makes it less risky and more suitable for novice investors. The company has proved itself worthy of confidence during economic downtimes and plays a key role in supplying materials to semiconductor manufacturers.

67% of retail investor accounts lose money when trading CFDs with this provider.

Investing vs Trading Rare Earth Stocks

When it comes to the length of your investment, your choice may be categorized as either a trading strategy or an investing strategy. More specifically, if you want short-term profits, you are looking at trading. Alternatively, if you want to invest for the long term, this is known as an investment strategy. Below, we’ll have a look at whether you should trade or invest in rare earth stocks.

Invest in Rare Earth Stocks

Investing in rare earth stocks may be a lucrative opportunity because this nascent industry has yet to develop outside China. Pooling your capital in a company with strong future potential could mean double or even triple-digit growth for your portfolio. However, you may have to wait for years for these gains to materialize. Also, there’s always a risk that the company’s plans do not go as expected, so you should be prepared and have a clear exit strategy if things go south.

Trade Rare Earth Stocks

Trading rare earth stocks may be suitable if you are just not ready yet to commit your capital in the long term. Many penny stocks are extremely volatile, which means that their prices are likely to go up (or down) in a very short time. If you can predict these swings correctly, you stand to earn massive profits. Traders use a wide variety of techniques and indicators to identify such opportunities. Stocks come in a variety of shapes, including augmented reality stocks, carbon capture stocks, and DeFi stocks.

How to Choose the Best Rare Earth Stocks for My Portfolio?

There is not much choice when it comes to rare earth stocks, but knowing how to discern wins from losses is extremely important. Below, we will discuss the most important aspects you should consider when choosing the best rare earth stocks. 

Risk Tolerance

As we’ve seen, there is only one U.S. company that owns a rare earth mine, and another in Australia. These companies may have a higher potential to become successful as they already own the facilities. When choosing the rare earth stock, make sure the company’s plans align with your level of risk tolerance. For instance, some investors may prefer to invest in MP Materials which already owns the mine, rather than Texas Mineral Resources that may go operational next year. Also, Materion could be a better choice for more risk-averse investors since it already has an excellent performance.  

Future Potential

Many rare earth companies have nothing more than plans and promises. When choosing the right one, make sure you do your due diligence. The management’s promises should resonate with you and convince you that it’s worth your attention. You should only pick companies in which you believe, otherwise, the lack of performance may disappoint you in the long run. 

Analysis Is Important

Analyzing such risky stocks is crucial. You should not base your investment decisions on simple guesswork. There are many types of analysis you could use; depending on your preferences and experience level, the two main categories include fundamental (typically for long-term investors) and technical (typically for short-term investors) analysis. 

Still, even making your decisions based on a solid analysis may not be enough. Make sure you define your exit strategy – or when you should sell the stock to minimize your losses. This can typically be done automatically via stop-loss orders. Other risk management strategies you may want to consider include diversification and the 1% rule – which states that you should not allocate more than 1% of your capital to one single trade.

Benefits of Rare Earth Stocks

The rare earth industry is a raw gemstone at the moment. The global demand is constantly increasing because these elements are used to produce the much-needed tech products we cannot live without – electric cars, smartphones, semiconductors. This industry stands to massively benefit from the increasing popularity of environmentally-friendly cars, too. 

Thus, the rare earth stocks will gain more popularity as their projects materialize. Also, as most of the current supply comes from China, any other company around the world that establishes itself on the market with a steady supply will most likely win solid contracts with other countries, too. 

The demand for rare earth supplies is not going anywhere. This may be the best time to invest in this emerging industry by purchasing rare earth stocks.  

Drawbacks of Rare Earth Stocks

One important aspect we haven’t mentioned so far is that rare earth elements belong to the commodities category. Commodities are raw materials, like crude oil, gas, or wheat, required to manufacture consumer goods. One important characteristic of commodities is that they are cyclical – when the economy goes well, the demand is higher; when there is an economic downturn, the demand is lower. Shortages can also occur, so commodity prices (including rare earth elements) are extremely volatile. 

This means that rare earth stocks will most likely have massive ups and downs, following the economic cycle. Also, rare earth elements or their extraction and processing may be the subject of government taxes or tariffs, which can cause massive swings in their prices or even price ceilings (like on gas or oil) that limit the company’s profitability.

Where to Buy Stocks – Full Broker Reviews

Unfortunately, there are not too many rare earth stocks outside of China right now. Some of them are quite speculative and risky, trading as penny stocks. Below, we will introduce you to two of the top online brokers where you can create a well-diversified portfolio and invest in a wide variety of assets.

1. eToro – Overall Best Place to Buy Stocks

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Depending on where you live, you may already be familiar with eToro. Although it’s a new brokerage in the United States, it has a strong track record of success in Europe, the Middle East, Australia, and many other regions. In the U.S., you can buy only real stocks, while many other regions also allow CFDs trading, which are agreements based on the price movements of the underlying asset. 

The platform has several stellar features that make it stand out from the crowd. For instance, the trading platform is extremely intuitive, ideal for beginners, with a clear menu and lots of asset categories to choose from. You can also copy other eToro users – as in, you can find successful traders on the platform and copy their whole portfolio. Whenever they open or close a position, your account will be adjusted automatically, and you will have the same gains as the copied master trader. 

Pros

  • Safe online broker, ideal for beginners
  • Multiple educational resources to get started quickly
  • Regulated in several regions around the world
  • The minimum deposit is only $50 in most countries
  • You can invest as little as $10 when buying stocks
  • Has a fully functional demo account, so you can try investing without risking money

Cons

  • Customer support is quite limited, but the help section is very thorough

 67% of retail investor accounts lose money when trading CFDs with this provider.

2. AvaTrade – Trade Stocks at 0% Commission

One of the leading CFD providers in the world, AvaTrade is one of the most popular online brokers. It boasts many trading platforms, including MetaTrader 4 and its proprietary platform, an in-depth educational section, a mobile-friendly app, and several payment methods. Just like eToro, all trading comes with zero commissions. 

AvaTrade is one of the oldest brokers in the world and has several offices around the globe, including Asia, Australia, Europe, and Africa. It has a strong reputation and is fully regulated across all the continents it operates in, except for the countries that banned CFD trading, such as the United States, Belgium, Iran, Zimbabwe, and Pakistan.

Pros

  • Cost-friendly structure with zero commissions
  • Multiple account types, ideal for beginners and veteran traders alike
  • Ideal for active traders due to competitive spreads
  • The proprietary platform AvaTrader is highly customizable and functional

Cons

  • High inactivity fees after 3 months, so it’s better suited for traders

71% of retail investor accounts lose money when trading CFDs with this provider.

How to Buy Stocks – Detailed & Explained in Full

Now that you can make an educated decision related to buying rare earth stocks, all you need to do is sign up with an online broker. Below, we will walk you through this process using our top recommended broker, eToro.

Step 1: Open a Broker Account

To start trading or investing, you need a brokerage account. Click below to access eToro’s homepage and sign up. Provide your personal details and upload your ID and proof of address, such as a utility bill from the past three months. These will be used to verify your identity and validate your account.

how to join etoro

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Deposit Funds

eToro automatically validates your trading account, so you can start trading right away. You may want to check out the demo account if you want to become familiar with its features first. When you are ready to invest, click on “Deposit” and choose your favorite payment method.

Deposit Funds

Step 3: Search for Stocks

eToro provides nearly 300 stocks in the industrial goods industry and more than 30 different commodities. Browse the offer to find out the best assets for your portfolio. 

Step 4: Buy Stocks

Once you found your desired stocks or commodities, click on “Trade”. The new window will allow you to customize your order, adding how much you want to invest, your stop-loss order, and your take-profit level, among others. 

How to Buy Rare Earth Stocks – Conclusion

Overall, rare earth stocks may be extremely profitable in the long run. The demand is only expected to go higher and higher since the world depends on technology, and many such products use rare earth elements in their composition. So far, the largest portion of the world’s rare earth necessities come from China, but many American and Australian companies, among others, are now focusing on extracting and processing rare earth elements.

1
$50Exclusive promotion
Our score10
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors
0% Commissionstart TradingOur score 10

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About Ana Frincu PRO INVESTOR

Ana Frincu is a freelance content writer specialised in finance and economics. She has a BA in International Business Management and a MA in International Taxation and Finance. With a keen interest in fintech and personal experience as an investor, she covers a broad range of topics, including trading, alternative data, cryptocurrency, and macroeconomics.