Fortescue Metals Group stands out as an Australian mining industry success story after having overcome extreme scepticism about its prospects. The PortfolioDirect modelling methodology assesses the Fortescue steady-state bond equivalent return, based on its 2015/16 operating outcome, at 4.7%. This is not especially exciting but significantly better than the negative return displayed by BHP Billiton, based on its recently reported 2015/16 financial results. (VIEW LINK) A 50% iron ore price increase raises the Fortescue bond equivalent yield to slightly over 19%. This also compares favourably with the 6% yield for BHP Billiton on the same assumptions. Fortescue now offers investors a stronger underlying financial performance than available through BHP Billiton. BHP and Fortescue are travelling in opposite directions. BHP is making a lengthy transition from Australia’s largest, most admired and widely held company to be a modestly performing miner still trying to define a sustainable strategy. Fortescue is gaining fresh respect within investment markets and, based on its existing business model, retains latent relative value capable of being re-priced without an improvement in cyclical conditions.