Who is bigger bhp or rio

But aluminium has been a far from pleasant market, with prices never recovering to the highs they reached before the financial crisis. View the Rio Tinto factsheet including charts, prices and research. View the BHP Billiton factsheet including charts, prices and research. Combined with weakness in other commodities, the deal left the group struggling to make the necessary debt repayments. It took years of brutal cuts to capital expenditure as well as asset sales and a rights issue to shore up the balance sheet.

Fortunately, despite another bout of commodity price weakness last year, things seem to be improving. Both BHP and Rio Tinto slashed their dividends a year ago, as the companies fought to preserve cash in the face of a wide ranging commodity sell off.

However, both have maintained dividends that were significantly ahead of their original worst-case guidance. View factsheet. This resilience is testament to the quality of their asset base. Production costs are so low that, while profitability may rise and fall, the mines themselves will rarely be loss-making. Partly because of the security provided by such top quality assets, previous dividend policies aimed to increase the payment to shareholders every year.

It was a promise that quickly broke when sudden commodity falls wiped out profits. Paying out a percentage of earnings can make dividends more volatile, but it does also give management more freedom to preserve cash when times are tough. In a cyclical industry like mining, we think that makes sense. However by no means is it irrelevant which company, if either, investors choose to back. BHP offers a prospective yield of 4. By comparison Rio has come a long way since the Alcan debacle, with debts back under control and an increasingly streamlined portfolio thanks to asset sales.

However, that progress means that the shares trade on a higher valuation, around The business is not without its risks either, and while aluminium is likely to be a key component in longer term economic growth, the market has been in the doldrums for years.

Important information - Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance.

Yields are variable and not guaranteed. By Barbara Lewis. After aggressive cost-cutting and asset sales to drive down debt, the two mining giants are positioning themselves to capture growth as commodity markets begin to recover from a crash that dented company balance sheets.

Both men sang from the same songsheet when presenting financial results last month. They ruled out the reckless spending of the past that almost led to financial ruin and promised to be safe, boring and disciplined, buying assets only when the price was right and maintaining the focus on lowering costs. Rio has the advantage of having cut debt faster, while investors have also been put off BHP by a dam burst at an iron ore mine in Brazil last year that could lead to years of litigation.

Coking coal has rallied because of demand in top consumer China, while oil needs an output agreement from the Organization of the Petroleum Exporting Countries to get a meaningful boost. Frances Hudson, investment director, at Standard Life says it is pragmatic to have exposure to at least one of the two big miners given their heavyweight presence on the FTSE index of leading British stocks. It does not appear among the top investors in BHP, but does have a smaller stake.

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