BHP Billiton Limited (ASX: BHP) was one of the favourite stocks amongst analysts for new money leading into 2014, and although it has yet to live up those expectations so far this year, it is still one of the most fancied from the mining sector.
BHP's shares are currently trading 0.2% down for the day at $37.34. That makes their decline since the beginning of the year 1.7% while they are sitting 6.2% below their February 52-week high.
Here are three reasons the experts still love BHP Billiton as an investment…
1. Low risk. Thanks to BHP'S "four pillar" strategy, which allows it to primarily focus on iron ore, coal, copper and petroleum to generate revenue, it is far less risky than other miners like Rio Tinto Limited (ASX: RIO) or Fortescue Metals Group Limited (ASX: FMG), which are much more leveraged to the iron ore price fluctuations.
2. Future growth. BHP is also expanding into the potash market. Potash, which is a key fertiliser ingredient, could well become the miner's fifth pillar in the coming years with demand expected to soar over the next few decades.
3. Share buyback. While the share price has dropped in recent times, it could well be spurred on by a share buyback program in the near future! The miner has indicated that when its net debt falls below US$25 billion (which could well happen next month), it will ramp up its shareholder returns and reward patient investors.
An even better bet than BHP Billiton
As is the case with all shares, there are risks involved in buying BHP Billiton stock. However, while the short-term could remain volatile, the long-term is still looking bright.
