Deutsche Bank has provided a rather optimistic outlook for Australia's largest diversified miner, BHP Billiton Limited (ASX: BHP). Citing a solid performance at its Blackhawk operation, the financial services group gave the stock a "Buy" rating as well as a 12-month price target of $43.60. From its current share price of $38.26, that represents a 14% upside for investors who buy today.
Here are three other reasons why you should consider adding BHP Billiton to your portfolio today.
1) Yield. Interest rates remain low, but BHP's shareholder returns look to only be increasing. It is trading on an estimated fully franked 3.4% yield (or 4.8% grossed up), while the miner is also tipped to initiate a share buyback program when it reports on Tuesday 19 August.
2) Commodity prices. Believe it or not, falling commodity prices could actually be good news for BHP Billiton in the near term. While higher-cost producers are being forced out of the market, low-cost producers like BHP are gaining market dominance.
3) Production. As a result of improving productivity, the miner smashed production records across four commodities for the year. This should bode well for the miner's earnings announcement next week while it will also help reduce overall costs in the long term.
A better buy than BHP Billiton Limited
