If you're looking for exposure to the resources sector, then you may want to consider BHP Group Ltd (ASX: BHP) shares.
That's the view of analysts at Morgans, which continue to rate the mining giant as one of the best options in the sector.
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What is Morgans saying about BHP shares?
According to a recent note, the broker has retained its add rating on the Big Australian's shares with a $47.00 price target.
Based on where BHP's shares are trading at present, this implies potential upside of almost 9% over the next 12 months for investors.
In addition, Morgans is expecting BHP to continue paying big dividends to investors. It is forecasting a fully franked $2.96 per share dividend from the miner in FY 2023. This equates to a generous 6.8% dividend yield, which stretches the total potential return to almost 17%.
Why is the broker positive?
Morgans likes BHP due to the company being a lower risk option in the sector. It also believes the company is well-placed to benefit from the global recovery from COVID-19 and highlights the resilience of its dividend profile.
Morgans commented:
We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP's operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.
Our long-term preference for BHP over RIO continues to pay dividends (literally), with BHP asserting itself as the better miner and with the stronger growth profile.
