5 reasons why BHP Billiton Limited is a solid BUY today

The miner has jumped 3.2% but still looks like an attractive buy.

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Shares in BHP Billiton Limited (ASX: BHP) have jumped more than 3.2% since hitting a low of $35.94 on Tuesday and have even outpaced the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) in that time, despite the index’s 1.5% leap yesterday.

Although BHP’s shares aren’t as cheap as they were just days ago, there are still plenty of reasons to like the stock today! Here are five of those reasons…

  1. The shares are still sitting 2.3% down for the 2014 calendar year. BHP was tipped by many analysts to be one of the best stocks for the year so this may be a good opportunity to stock up!
  2. Although iron ore and coal are falling in price, BHP is a low-cost miner so can weather the storm. In fact, the low prices could well push smaller competitors out of the market which would be a good thing for BHP!
  3. Based on forecasts for 2015, the stock offers a fully franked 3.6% dividend yield. With interest rates set to remain low for some time yet, that yield is not something to be sneezed at.
  4. It offers far greater diversification than other miners like Rio Tinto Limited (ASX: RIO), Mount Gibson Iron Limited (ASX: MGX) or Fortescue Metals Group Limited (ASX: FMG), giving it a much greater level of security.
  5. As upsetting as it is for the workers, BHP is cutting staff (possibly up to 3,000, according to recommendations made to the company) in its iron ore division to continue improving on costs. This will boost margins in the long-run.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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