Fortescue Ltd (ASX: FMG) shares have had a solid run, climbing 17% over the past 12 months to $18.68.
That's a strong return for a mining stock. But it also raises an important question.
At these levels, is Fortescue still a top buy in March, or are there better options in the sector?
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There's a lot to like about Fortescue
To be clear, I'm not negative on Fortescue.
In fact, if I already owned the shares, I wouldn't be in a hurry to sell them.
The company continues to generate strong cash flow, which supports its dividend. Its latest result highlighted a fully-franked interim dividend of 62 cents per share, reflecting a 65% payout of profits.
It is also one of the lowest-cost iron ore producers globally, which gives it resilience when commodity prices weaken.
On top of that, Fortescue is investing heavily in decarbonisation and future-facing projects, while also building exposure to copper through its acquisition of Alta Copper.
So there's clearly a lot going right.
But I'd still choose BHP first
That said, if I were adding mining exposure to my portfolio today, I would lean toward BHP Group Ltd (ASX: BHP) shares instead.
The main reason comes down to diversification and future earnings drivers.
Fortescue is still heavily reliant on iron ore. While that has been a very profitable commodity, it also makes earnings more cyclical and tied to a single market.
BHP, on the other hand, offers exposure to a broader mix of commodities.
Most importantly, it has made copper a major part of its portfolio.
Copper could be the key difference
This is where I think the gap between the two companies becomes most important.
Copper demand is expected to grow strongly over time, driven by electrification, renewable energy, and data infrastructure.
BHP is already one of the world's largest copper producers, with operations like Escondida and Olympic Dam underpinning its position.
Fortescue is clearly moving in that direction as well, but it is starting from a much smaller base. Even with acquisitions, it is unlikely to match BHP's scale in copper any time soon.
For me, that matters.
If I'm investing for the next decade, I want meaningful exposure to commodities with structural growth tailwinds, and BHP offers that today.
Income vs diversification
One area where Fortescue arguably has the edge is income. It has a strong track record of paying generous dividends, supported by its low-cost operations and high margins.
That makes it an appealing option for income-focused investors.
But I think there's a trade-off.
BHP may not always offer the highest dividend yield, but its more diversified earnings base could make its long-term returns more balanced.
Foolish Takeaway
Fortescue is a high-quality miner with strong cash flow, attractive dividends, and a clear strategy to evolve over time.
If I owned the shares, I'd be happy to hold onto them. But if I were putting fresh money to work in the mining sector this month, I'd be leaning toward BHP shares instead.
For me, its diversification and leadership in copper give it the edge right now.
