Fortescue vs PLS Group: Which ASX mining share is the better buy?

Fortescue vs PLS Group shares: Which blue chip miner has more upside?

When it comes to ASX-listed mining giants, Fortescue Ltd (ASX: FMG) and PLS Group Ltd (ASX: PLS) both stand out for investors seeking exposure to the resources sector. While both operate out of Western Australia and count as blue-chip names in their field, their businesses are shaped by very different commodities: iron ore for Fortescue, and lithium (with a dash of tantalum) for PLS Group. With both sectors facing different market dynamics, it’s worth digging into the numbers to see which share might offer more upside from here.

The case for Fortescue

Fortescue is one of the world’s major iron ore producers, operating extensive mines and infrastructure in the Pilbara. As of its company profile, Fortescue’s integrated operations cover multiple mining hubs, its own heavy haul rail, and port facilities at Port Hedland. It has long leveraged its scale to keep costs competitive, making it a key supplier to steelmakers worldwide.

Notable points from Fortescue’s current stats:

• Market cap of $49.85 billion, making it a heavyweight on the ASX.
• P/E ratio of 12.08, notably lower than PLS Group’s.
• A generous dividend yield of 6.67%, fully franked at 100%.
• Earnings per share of $0.931, with a dividend per share of $1.08, suggesting strong cash return to investors (though dividend yields can fluctuate).

One particularly attractive factor is the consistent, fully franked dividends Fortescue has paid, even as iron ore markets have gone through some turbulence.

The case for PLS Group

PLS Group, formerly Pilbara Minerals, is well known as a top lithium and tantalum miner. The company’s mainstay is the Pilgangoora project in the Pilbara—one of the largest hard-rock lithium-tantalum deposits globally. According to its most recent public description, the company’s reach now extends to Brazil through its Colina lithium project. PLS Group has made impressive strides from exploration to production in less than four years and is aggressively expanding its global footprint.

The most eye-catching fundamentals for PLS Group:

• Market cap of $12 billion, making it smaller than Fortescue but still a top ASX resource name.
• A P/E ratio of 22.92, substantially higher than Fortescue’s.
• Dividend yield of 1.35%, also fully franked.
• EPS of $0.161 and dividend per share of $0.05.

While its dividend is modest for now, PLS Group is clearly still focused on early-stage expansion in a sector (lithium) that’s pegged to major growth in battery and EV markets.

Valuation comparison

Presented side-by-side, here’s how the key stats stack up:

Note: P/E ratios for both companies are based on reported figures, but if you do the math, Fortescue’s EPS and P/E are roughly consistent; likewise for PLS Group, though payout ratios differ. Both companies’ franked dividends are a plus for Australian investors.

Fortescue trades at a P/E almost half of PLS Group’s, despite offering a substantially higher dividend yield. That reflects current market scepticism around iron ore pricing, but also perhaps optimism on lithium’s future for PLS Group.

Recent share price momentum

Comparing recent performance as at 5 October 2026:

• Fortescue closed at $16.19, after a flat day, and has returned -21.5% year to date.
• PLS Group closed at $3.72, up 0.5% that day, and is down -11.1% year to date.

So both shares are in negative territory this year, but PLS Group has held up better, falling about half as much as Fortescue over 2026 so far.

Which is the better buy?

Looking at the fundamentals, Fortescue offers a much higher fully franked dividend yield and a far lower P/E ratio than PLS Group. That tells me the market sees more risk or less growth in old-school iron ore compared to the lithium sector, which is still brimming with hype and optimism. However, Fortescue’s ability to pay out substantial and consistent dividends, even while its share price is down more than 20% year to date, is hard to ignore for income-focused investors.

PLS Group, in contrast, is delivering modest profits and a small, fully franked dividend, but it’s valued at almost double Fortescue’s earnings multiple. That’s a big vote of confidence in the future of battery materials, but with a dividend that’s more a gesture than a consistent income stream, and a share price that’s still down 11% year to date.

If you’re looking for robust, income-driven returns and value, I’d lean toward Fortescue. If you’re happy to take on more volatility for the chance of outsized growth—should the lithium sector take off again—PLS Group is the pick. Personally, given the current data, my pick would be Fortescue for its combination of scale, franked dividends, and more appealing valuation, with the caveat that its upside rests on iron ore not staying depressed for too long. PLS Group could have more explosive upside if lithium surprises to the upside, but at today’s pricing, I think Fortescue’s risk-reward trade-off stands out more.

The post Fortescue vs PLS Group: Which ASX mining share is the better buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.