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3 Reasons To Follow The Big Dog In Natural Resources

3 Reasons To Follow The Big Dog In Natural Resources
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BHP Billiton (NYSE: BHP) is the world's largest natural resources company. It's now undergoing a transformation and focusing on four areas: coal, copper, oil and iron ore. Here are three reasons why investors should follow the big dog in commodities in this change in corporate structure.

Opportunities In China

If there is one company that is a play on China, it is BHP Billiton. That can be seen by the areas it has chosen to emphasize. China is the world's largest consumer of copper, coal, iron ore and many other industrial commodities. BHP Billiton is continuing to place itself to profit from growth in the People's Republic.

Related Link: 3 Reasons To Ride Railroad Stocks

Growth In Other Markets

As detailed in previous articles on Benzinga, the Obama administration has lined up billions of dollars for economic development commitments for Africa. Asia and Africa will be the boom areas ahead, according to a report from McKinsey Global Institute, the research arm of premier consulting firm McKinsey & Co.

The Big Dog Pays A Big Dividend

On CNBC recently, Kevin O'Leary from Shark Tank stated, "Seventy-three percent of the S&P 500's returns in the last 40 years came from dividends, not capital appreciation."

At present, the average dividend yield for a member of the S&P's 500 Index (NYSE: SPY) is under 2 percent. BHP Billiton has a dividend yield of 3.26 percent. O'Leary would approve.

Wall Street has reacted positively to the moves by BHP Billiton. It is up for the last week, month, quarter, six months and year of market action. BHP Billiton has risen by more than 4 percent year to date. With its robust dividend, shareholders should be looking at a healthy total return from BHP Billiton as it builds itself to be more profitable.

Disclosure: At time of writing, the author had no position in any stocks, bonds or other securities mentioned.

Posted-In: Africa China coal CopperLong Ideas Dividends Economics Trading Ideas Best of Benzinga


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