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:
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%.
The post 2 ASX 200 mining shares that could be buys appeared first on The Motley Fool Australia.
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More reading
- 5 things to watch on the ASX 200 on Friday
- Mining shares in the ASX 200 might unearth US$26b worth of dividends
- Leading brokers name 3 ASX shares to buy today
- ASX 200 Weekly Wrap: ASX finishes FY21 on a high
- Iluka (ASX:ILU) share price boosts 10%, hits new 52-week high
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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