Shares of BHP Billiton Limited (ASX: BHP) appear to have taken a breather today, having fallen 18c or 0.48% on a slightly off day for the overall S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
With the shares now trading at $37.49, they are looking quite appealing for investors wanting exposure to the mining sector – particularly given that it offers a juicy 3.6% fully franked dividend yield based on forecasts for 2015.
While companies like National Australia Bank Ltd. (ASX: NAB) and Commonwealth Bank of Australia (ASX: CBA) offer even more appealing dividends in this low interest rate environment, the chances of also recognising strong long-term capital gains are much greater with BHP's shares.
That is because the banks' shares are heavily overvalued while BHP is trading at a much more reasonable premium.
Although I do not own shares in the miner currently, it is sitting firmly on my watchlist. Should it drop much further in price, I may be tempted to hit the "buy" button.
Want an even BETTER yield and growth prospects?
BHP Billiton's dividend is certainly appealing, but given the miner's sheer size, its growth prospects become more limited.
