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Should you buy these ASX resources shares?

Credit: iStock

Although it has been a bit of a rocky road over the last couple of weeks, I expect the positive outlook for the global economy will lead to the resources sector outperforming in 2018.

I think that this could make it well worth having a little exposure to the sector in your portfolio.

With that in mind, are these resources shares in the buy zone today?

BHP Billiton Limited (ASX: BHP)

I think recent share price weakness has brought the mining giant’s shares down to a very attractive level. Especially with strong global economic growth likely to support favourable prices for the commodities that BHP Billiton mines. This should put the company in a position to deliver another solid profit result and consider a further dividend increase. At the current share price the miner’s shares provide a trailing fully franked 4.3% dividend.

Kidman Resources Ltd (ASX: KDR)

This prospective lithium producer’s Mt Holland project has the potential to be a world class asset in my opinion. Last year the company signed a strategic joint venture with lithium giant Sociedad Quimica y Minera de Chile which puts it on course to commence production later this year. This month Kidman is due to release its Earl Grey project mineral resource estimate. I would suggest investors hold tight until that is released and focus on companies that are already producing the metal for now.

OZ Minerals Limited (ASX: OZL)

This leading copper producer could be a good option for investors. Demand for the metal used widely in power and construction is expected to be strong again this year, putting OZ Minerals in a solid position to profit. Earlier this week analysts at Citi retained their buy rating and $11.10 price target on OZ Minerals’ shares. This implies potential upside of 20% for its shares over the next 12 months.

As well as BHP's dividend, I think this growing dividend share would be worth picking up this week.

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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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