Should you buy these 3 ASX resources shares?

I think to maintain a diverse portfolio a little exposure to the resources sector is needed.

Considering the outlook for the global economy is strong, now could be a good time to gain that exposure if you don’t already have it.

With that in mind, I picked out three resources shares which I would consider buying today. Here they are:

BHP Billiton Limited (ASX: BHP)

My first pick in the sector would have to be this mining giant. I think the strong demand being experienced for commodities and its diverse and highly profitable operations will put the company in a great position to deliver a bumper profit result in FY 2018 and FY 2019. I expect this to also lead to further increases in its dividend. Incidentally, BHP Billiton’s shares go ex-dividend on Thursday for its interim dividend. This could make it an opportune time to snap up shares in my opinion.

Fortescue Metals Group Limited (ASX: FMG)

I think Fortescue is one of the best value shares in the resources sector at the moment and could be a great investment if the low grade iron ore discount closes. Chinese steel producers have been more interested in higher grade ore over the last 12 months, causing the discount between high grade and the low grade ore which Fortescue mines to expand greatly. If this discount closes or Fortescue delivers on its plan to increase the grade of its ore, then I expect it will be reflected in its share price.

Rio Tinto Limited (ASX: RIO)

I’m quite positive on the outlook for higher grade iron ore and copper in the future due largely to demand from the Chinese market. As these two commodities combined make up more than half of the company’s revenue, I think it bodes well for Rio Tinto’s future growth. Especially if the strong global economy supports the prices of the other commodities it mines. Another bonus is its generous dividend and sizeable share buyback program.

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Motley Fool contributor James Mickleboro has no position in any of the 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 Scott Phillips.

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