If you're looking to invest in the resources sector, then you may want to look closely at the highly rated ASX 200 mining shares listed below.
They have both been named as buys recently and tipped to generate strong returns for investors. Here's what you need to know about them:
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Rio Tinto Limited (ASX: RIO)
The first ASX 200 mining share to look at is Rio Tinto. It is one of the world's largest miners with a portfolio of world class operations across a number of commodities.
Chief among them is iron ore, which contributes significantly to the company's earnings. This is a big positive given that the steel making ingredient is currently trading at sky high levels.
One broker that thinks the Rio Tinto share price is great value right now is Macquarie. It recently retained its outperform rating and lifted its price target to $163.00. Its analysts are expecting favourable commodity prices to support strong earnings and dividends in the near term.
In fact, with the Rio Tinto share price currently fetching $126.22, Macquarie is forecasting a double digit fully franked dividend yield in FY 2021 and something similar next year.
South32 Ltd (ASX: S32)
Another ASX 200 mining share to look at is South32. It is a mining company with exposure to a range of commodities such as alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc.
It is thanks to its aluminium exposure that analysts at Goldman Sachs are bullish on South32. The broker believes that aluminium is in the early stages of a multi-year bull market and expects South32 to benefit greatly.
It is for this reason that the broker has South32 on its conviction buy rating with a $3.80 price target. This compares to the latest South32 share price of $2.94. Goldman is also forecasting generous dividends in the near future. In FY 2021 it is expecting a yield in the region of 3.3%, whereas next year it is forecasting a yield closer to 8.5%.
