Better Buy: Teck Resources Ltd vs. BHP Billiton Limited

Teck Resources Ltd (NYSE: TECK) lays claim to being the largest diversified miner in Canada. But its roughly $12 billion market cap pales in comparison to mining industry giant BHP Billiton Limited (NYSE: BHP), one of the largest diversified miners in the world with an over $100 billion market cap. That difference, however, doesn't make BHP the better investment, here's why you might prefer the smaller of this pair.

BHP's largest businesses are petroleum, copper, iron ore, and metallurgical coal. Iron ore is the most important, accounting for roughly 45% of underlying EBITDA in fiscal year 2017. That said, the company's coal business, around 18% of EBITDA, has a notable focus on steelmaking coal, increasing the miner's overall reliance on the steel industry. Teck's business is made up of steelmaking coal, copper, and zinc. Steelmaking coal is Teck's biggest business, at roughly 70% of gross profit before depreciation and amortization. So both miners are highly dependent on the steel industry, with Teck a little more so.

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Source: Fool.com