BHP, Rio Tinto (commodities): Highly exposed to the prices of mi

BHP, Rio Tinto (commodities): Highly exposed to the prices of minerals and metals (iron, copper, coal). Their performance is closely tied to global demand, particularly in China.

Rewards

Trading at 25.3% below estimate of its fair value
Earnings grew by 25.5% over the past year
Trading at good value compared to peers and industry
Analysts in good agreement that stock price will rise by 20.6%

Risk Analysis

Earnings are forecast to decline by an average of 0.06% per year for the next 3 years
Dividend of 6.75% is not well covered by free cash flows