BHP keeps pretty much all its profits and makes a futher 20% on that each year - that is value added for shareholders.
ZFX is not doing this, it is just paying out a fair whack of most of its profits and not value adding, when the profits are reduced, well the show is over.
BHP investors will be perpard to pay more for BHP because of this and put it on a higher PE, Investors will be less willing to buy ZFX because the long term potential is a bit diluted so it does not trade on a high PE.
Equating the two and you see they are valued fairly, same goes with RIO as well hmm.
ZFX
zinifex limited
