Is BHP the best ASX resources share?

Is BHP Group Ltd (ASX: BHP) the best resources play on the ASX?

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It's fair to say that the BHP Group Ltd (ASX: BHP) share price has come off the boil somewhat over the last month or two. If we look back to early July and the dawn of the new financial year, BHP shares were commanding a new 52-week high of $42.33. It was the first time since the mining boom of 2011 that BHP shares crossed the $40 mark. Lucky investors who bought in on a New Year's resolution saw a YTD price gain of over 25% (not even including dividends) by July. But it was not to last.

BHP shares ended trading on Tuesday at $37.25 – a still historically high price for the company, but nonetheless down 12% from the highs of July. But I think BHP might just be the best ASX resources company to own for today, tomorrow and the years that follow.

Who is BHP?

BHP is our largest ASX mining company and the world's second largest producer of iron ore. Unlike its iron mining compadres Rio Tinto Ltd (ASX: RIO) and Fortescue Metals Group Ltd (ASX: FMG), BHP gets less than half of its earnings from iron ore – 48% to be exact in the 2019 financial year (which is also unusually high and due to the surge in iron ore prices in 2019). The remaining contributions stem from copper at 19%, petroleum at 16% and coal at 17%.

Why do I like BHP so much?

It's down to diversity, low costs and longevity. Although the BHP share price does rise and fall on the back of iron prices, the exposure to copper in particular is something I'm very bullish on. The world may be (glacially) weaning itself off fossil fuels, but iron and copper are the building blocks of an advanced economy. Between India, Brazil, Taiwan, Indonesia, Vietnam and of course China, I expect demand in perpetuity for these commodities as these emerging markets grow into the coming decades.

Further, the snowballing electrification of cars and the global vehicle fleet that we are starting to see will (in my view) also ensure a rising demand for copper over the coming decade – positioning BHP to be a happy caterer to this trend.

Foolish Takeaway

As one of the world's lowest-cost commodity producers, I see a bet on BHP as a bet on global growth – and its one I'd be happy to take. I'm still waiting for a cheaper entry position though – commodities are cyclical after all, and if you can play the game and buy in at a low price, you'll be laughing all the way to the bank.

Motley Fool contributor Sebastian Bowen 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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