Investors that are looking for options in the mining sector might want to consider the two ASX 200 mining shares listed below.
Both have recently been named as buys by brokers and tipped to provide a winning combination of capital returns and income.
Here's what you need to know about them:
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Mineral Resources Ltd (ASX: MIN)
Morgans is very positive on this mining and mining services company which has exposure to lithium, iron ore, and energy.
It currently has an add rating and $107.00 price target on its shares and is forecasting an 8.8% dividend yield in FY 2024.
The broker commented:
MIN is a founder-led business and top tier miner and crusher that has grown consistently despite barely issuing a share over the last decade. Also helping our investment view is that MIN's diversification leaves it far more capable of tolerating volatility in lithium markets than its peers in the sector. We see MIN's lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H'CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.
South32 Ltd (ASX: S32)
Another ASX 200 mining share that has been named as a buy is diversified miner, South32.
Goldman Sachs is a fan of the company and recently upgraded its shares to a buy rating with a $4.90 price target. The broker is also expecting a 60 cents per share dividend in FY 2024, which equates to a massive yield of 13.5%.
Its analysts commented:
We upgrade S32 to Buy (from Neutral) on attractive valuation: Trading at ~0.95xNAV (A$4.6/sh) and on an implied TSR of ~29%, and an attractive NTM EV/EBITDA multiple of ~2.1x vs. the sector average of 4.5x. We assume the share buyback continues (at ~US$250mn p.a) and S32 pays out 50% of earnings (40% ordinary, 10% special dividend component) with the FY23 full year result. On our estimates, S32 is on a supportive dividend yield of c. 5% in FY23, increasing to 14% in FY24.
