Why BHP Billiton Limited's share price is off to a flying start in 2017

BHP Billiton Limited (ASX:BHP) has skyrocketed in price since this time last year

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of mining heavyweight BHP Billiton Limited (ASX: BHP) enjoyed a stellar year in 2016 and are off to a flying start again in 2017. While the shares have risen 1.3% today alone to trade at $26.36, they have gained an impressive 5.2% since they traded for $25.06 at the beginning of the year.

By way of comparison, the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has risen 'just' 2%, even though it has advanced in each of its sessions so far in 2017, bar one (it fell 0.8% on Tuesday this week).

Of course, those who have held their shares since the beginning of 2016 will be singing the miner's praises. Its shares gained more than 40% over the year, and rose 78% after bottoming out at around $14 in January 2016.

As has been the case with various other miners, including Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO) and Whitehaven Coal Ltd (ASX: WHC), BHP's resurgence can largely be attributed to a lift in the price of iron ore and coal. Oil prices have rebounded nicely too, providing plenty of drive for the BHP Billiton share price.

If commodity prices continue to rise, or even if they remain stable at their current levels, BHP's shares could have further to run. That said, investors do need to be aware that further capital gains from the stock (and indeed, dividends as well) will be largely dependent on that happening: if commodity prices decide to fall again, it could put a real dent in BHP's prospects.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »