The Iluka Resources Ltd (ASX: ILU) share price was a top performer amongst the ASX 200 in October.
The company’s shares have crashed 6% lower in early trade this morning, but finished last month up 14.91% at $9.40 per share.
So, what drove Iluka Resources shares higher last month, and can the growth continue?
Why the Iluka Resources share price climbed higher
A stronger commodities pricing environment helped a steady increase in the Iluka Resources share price throughout the middle part of October.
However, much of the movement came in the last few days of the month.
Iluka is looking at boosting shareholder value by divesting its Mining Area C (MAC) royalty business associated with BHP Group Ltd (ASX: BHP).
Iron ore prices have been relatively solid in 2019, which could see BHP royalties surge higher in value for Iluka’s earnings.
Another key factor driving Iluka shares higher is a solid quarterly result for the Aussie miner.
Iluka reported zircon production up 29% on the prior period to 94,000 tonnes in the September quarter. Rutile numbers climbed 18% higher to 48,000 tonnes while synthetic rutile production totalled 57,000 tonnes.
Managing Director Tom O’Leary was bullish on the result and hailed Iluka’s mineral sands business as market leading.
Should you buy Iluka shares?
Despite the strong October performance, the Iluka share price is falling lower in early trade today.
Iluka’s business is highly cyclical and we have seen some volatility on the markets so far in 2019.
At the time of writing, Iluka shares were down more than 6% to $8.83 per share.
With a market cap of $3.74 billion and a dividend yield of 2.72% per annum, Iluka could be a good ASX dividend buy.
A 12.23x price-to-earnings ratio makes it cheaper than BHP Group Ltd (ASX: BHP) and I think Iluka shares could be good value right now.
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Motley Fool contributor Kenneth Hall 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.