With commodities prices falling over the past few years, resource companies have seen their revenues and values drop. But some of these stocks offer value even in the midst of depressed prices. Today, we look at Alcoa, which mines and refines aluminum, and also makes finished products. Alcoa’s manufacturing arm, which consists of engineered aluminum products such as parts for cars and jet engines, is enjoying much stronger growth than its mining and refining business. To increase the value of both its businesses, the company is splitting in two, a move that should be complete in late 2016. Alcoa is also in the midst of a $900-million restructuring which will improve its prospects as aluminum demand starts to rise again in 2016. We view Alcoa as a mining stock to buy for conservative investors.

ALCOA INC. (New York symbol AA; www.alcoa.com) plans to split itself into two separate firms.

One will focus on Alcoa’s upstream operations, which include mining bauxite ore and refining it into bulk aluminum products. This business will be the world’s fourth-largest aluminum producer, with $13.2 billion of annual revenue and $2.8 billion of gross earnings.

The other company will focus on engineered aluminum products, such as components for cars and jet engines. This firm has $14.5 billion of annual revenue and $2.2 billion of gross earnings.

The other company will focus on engineered aluminum products, such as components for cars and jet engines. This firm has $14.5 billion of annual revenue and $2.2 billion of gross earnings.

If shareholders approve, Alcoa will complete the split in the second half of 2016. It will hand out shares of both companies to its investors, who will not be liable for capital gains taxes until they sell them.

The split will help unlock some of Alcoa’s value, particularly as demand for its engineered products is growing much faster than bulk aluminum. The upstream business could also become an attractive takeover target for a larger mining firm.

Mining stocks: Manufacturing business growing quickly

Meanwhile, Alcoa earned $109 million in the three months ended September 30, 2015, down 70.5% from $370 million a year earlier. Per-share earnings declined 77.4%, to $0.07 from $0.31.

Revenue fell 10.7%, to $5.6 billion from $6.2 billion, as the company closed less-profitable plants. As well, aluminum shipments declined 7.2%, while prices fell 25.1%.

The company expects global aluminum demand to rise 6.5% in 2015, unchanged from its earlier forecast. In addition, Alcoa’s restructuring saved it $849 million in the first nine months of 2015, and it should easily reach its target of $900 million for the full year.

Recommendation in Wall Street Stock Forecaster: BUY.

For our advice on making profitable selections in mining stocks, read: Copper stocks have advantages over precious metal investments.

For our advice on making investment decisions about major and junior mining stocks, read What are mining stocks?