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Should you BUY BHP Billiton Limited shares today?

BHP Billiton Limited (ASX: BHP) has rallied strongly in recent weeks thanks, in part, to better-than-forecast manufacturing data from China as well as a strengthening iron ore price. In fact, it has rallied more than 6.6% in just under three weeks and is now trading just 1.1% below its 2014 starting price.

Despite the stock’s recent performance, I believe investors still have plenty of reasons to gravitate towards the miner.

To begin with, it is a much safer bet than rivals like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) (despite trading on a higher P/E ratio than either of them), and is still leveraged to a potential recovery in the iron ore and coal prices.

But its long term is what is even more appealing. While it is heavily focused on reducing costs and improving productivity measures, it is also set to benefit over the coming decades from its heavy exposure to the coal and potash markets.

Demand for both resources is pegged to skyrocket as the global population continues to climb. While neither are providing much of a boost to earnings currently, you can bet they will deliver strong returns in the long run.

The stock is currently trading at $37.57, giving it a forecast P/E ratio of 13.4 and an estimated fully franked dividend yield of 3.4% – which is not bad considering the low interest rate environment!

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

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