Shares of BHP Billiton Limited (ASX: BHP) have received a boost today despite a heavy fall in the iron ore price on Friday.
According to The Metal Bulletin Ltd, iron ore crashed 1.68% to just US$62.21 per dry metric tonne – an alarming 54% below its US$135 price tag at the beginning of last year. Given that iron ore accounts for the largest portion of BHP Billiton's earnings, you'd be excused for questioning why the miner rose so strongly. After all, Rio Tinto Limited (ASX: RIO) retreated by 0.2% while Fortescue Metals Group Limited (ASX: FMG) crashed 1.7% following the news.
However, BHP Billiton is a diversified miner with a heavy focus on coal, copper and petroleum in addition to its iron ore operations. The price of oil (which accounts for the second largest portion of the miner's earnings) surged nearly 8% on Friday after data from Baker Hughes revealed a massive decline in the number of rigs drilling for oil in the U.S., easing oversupply concerns.
BHP Billiton's shares rose as much as 2.2%, heavily outpacing the gains made by the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), to hit a $29.88 intraday high. At that price, the stock is tipped to yield a very tempting 5.2% (fully franked) this financial year – a yield almost unheard of from a miner.
Given that BHP Billiton quotes its dividend in US dollar terms the yield may increase if the Australian dollar falls any further. I bet you didn't know that about BHP Billiton's dividend!
