Core Viewpoint - Mesabi Trust (NYSE:MSB) is experiencing a potential turnaround due to the unexpected absence of recessionary demand for iron ore and a breakout in commodity prices since March 2024, making it an attractive investment opportunity [3][4]. Upside Arguments - Cleveland-Cliffs has resumed mining operations at Mesabi's main royalty assets, which could enhance revenue generation [4]. - The U.S. Federal Reserve is likely to maintain interest rates, potentially leading to increased revenues and higher iron ore prices [4]. - China's economy may be bottoming out, with record iron ore imports in 2023, suggesting improved demand dynamics [4]. - Ongoing arbitration regarding underpaid royalties could result in favorable outcomes for Mesabi Trust [4]. Dividend Outlook - Mesabi Trust has a historical dividend yield of approximately 5.83%, with expectations of a forward yield of around 6% based on current production rates and ore pricing [6][7]. - The trust has a track record of increasing dividend payouts in line with iron ore prices, with dividends rising to over $5 annually during recent highs [6][7]. Technical Analysis - The stock has shown low volatility since May 2023, indicating a stable base formation, with positive trading indicators suggesting potential upward movement in iron ore prices [7][8]. Historical Performance - Over the past decade, Mesabi Trust has delivered a total return of 106.6%, outperforming various Treasury investments [11]. - The trust has proven to be a strong diversification option for yield generation, with significant potential for capital appreciation during favorable market conditions [11][12]. Conclusion - Mesabi Trust is positioned as a compelling investment choice for those seeking yield and inflation protection, with a recommendation to buy trust units [12].
If Fed Doesn't Get Serious About Inflation, Buy Mesabi Trust (Rating Upgrade)