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What is MM’s preference out of PLS, ILU & WHC?

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What is MM’s preference out of PLS, ILU & WHC?

Hi James, Can you comment on your preference for holding ILU WHC PLS short to medium term for a income investor. Thanks.  Shabbir.

Answer

Hi Shabbir,

That’s a tricky question with these businesses have very different profiles over time, Whitehaven Coal (WHC) is all about the now whereas Pilbara Minerals (PLS) is all about the future and Iluka (ILU) probably resides somewhere in between the two with its combination of mineral sands and transition towards rare earths, firstly lets look at their forecasted yield over the next 12-months:

  • Whitehaven Coal (WHC) ~14%, Iluka (ILU) 4.9% and Pilbara (PLS) nothing as of yet.

Hence at this stage for medium-term income we would be considering a mixture of WHC and ILU, however, please bear in mind that resource companies are very cyclical, and earnings go up and down more than a stable industrial company for example, therefore volatility in dividends is also more likely.

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Iluka (ILU)
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