scroll

BHP Group (BHP) vs RIO Tinto (RIO)

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 26/07/2025

BHP Group (BHP) vs RIO Tinto (RIO)

I appreciate that this question has been asked many, many times but please help me understand why BHP is so heavily preferred over RIO? Is it a bias or am I missing key info? In trying to get clarity I keep bumping my head against the following details RIO's share price appreciation outperforms BHP - over 1, 3 and 10 years. RIO's metrics are pretty similar to BHP's when one compares the LSEG stock reports. RIO pays a slightly better dividend 5.2% v 4.6% RIO has Simandou and Oyu Togoi in the pipeline so Fe ore and Cu are debatable (51% v 55% ; 16% v 25% with imminent changes). Then on a smaller scale RIO has Aluminium vs BHP's Ni and coal. In looking at Resource ETFs , they hold a higher allocation of BHP to RIO. Why? And for full disclosure I also hold both in a similar ratio to the ETFs. What am I missing? Why BHP over RIO? Thanks and regards, JanP

Answer

Hi Jan,

In terms of relative performance there isn’t much between the two and we could even argue too much research actually goes into whether investors should own BHP or RIO:

Year to-date BHP is +3.5% and RIO +0.3%, and since the COVID low BHP is +91% compared to RIO + 63% (dividends aside) – relative performance often depends on where you draw the line in the sand.

In terms of portfolios and ETFs in general, RIO has a market cap around 80% of BHP hence from an equal market weight perspective it should have a smaller holding. In terms of the markets preference its largely based around the next chapter, from the MM Site:

BHP has 1 Strong Sell, 8 Holds, 7 Buys and 2 Strong Buys.
RIO has No Sells, 7 Holds, 6 Buys and 2 Strong Buys.

We use UBS research more than others, and they have a preference for RIO over BHP here – but it’s a fine line. From out perspective, we prefer BHP’s more aggressive runway into copper than RIO, whereas RIO is going harder in Iron Ore, and they’re also backing Lithium after they paid US $6.7 billion for Arcadium Lithium, which immediately positioned Rio as the world’s third-largest lithium producer, with operations in Argentina, Australia, Canada, and more, with the aim of scaling to over 200,000 tonnes of lithium carbonate equivalent (LCE) per annum by 2028, potentially reaching 460,000 tpa by 2033. We have Lithium exposure via Min Res (MIN), Liontown (LTR) and Albemarle (ALB US) in the US

We still have a preference for BHP due to their commodity mix, with this view taking into consideration the other stocks/commodity exposures we own in our portfolio’s.

chart

BHP Group (BHP) v RIO Tinto (RIO)

LAST UPDATED 25/07/2025 12:42

Latest Reports

Weekend report 26/07/2025

CORRECTWeekend Q&A: The ASX200 is feeling “soft” as we approach August & September

The ASX200 slipped 1% last week, eroding 40% of July's gains as the RBA took the shine off the local market even as global indices pushed to fresh highs, i.e. the US S&P 500 advanced +1.5% last week. The S&P 500 notched its 5th straight record weekly closing high, courtesy of more than 80% of the 169 S&P 500 companies that have reported to date have beaten Wall Street’s expectations. In Australia, it's been a more mixed and polarised affair on the reporting front, but with the “Big Four Banks” retreating on average close to 4% the ASX was always going to struggle to match its overseas peers.

Afternoon report 25/07/2025

The Match Out: Stocks end the week lower; Resources join Banks in the sell-off

The ASX put in a weaker session seeing sustained selling through the day, as softer iron ore prices weighed on the materials space. With heavyweight resources and the big banks down, the index was fighting a losing battle from start to finish, though we still managed to close higher for the week.