BHP, Rio Tinto (commodities): Highly exposed to the prices of mi

BHP, Rio Tinto (commodities): Highly exposed to the prices of minerals and metals (iron, copper, coal). Their performance is closely tied to global demand, particularly in China.

Rewards

Trading at 27.1% below our estimate of its fair value
Earnings are forecast to grow 4.76% per year

Risk Analysis

Profit margins (14.1%) are lower than last year (23.8%)
Dividend of 5.17% is not well covered by earnings