Why I'd ignore the Sirius Minerals share price and buy this FTSE 100 dividend stock

A miner down a mine shaft

The protracted timescale between initial planning and maiden output at the North Yorks polyhilate project means I have long adopted a cautious stance on Sirius Minerals(LSE: SXX).

Of course, such uncertainty is part and parcel of the entire mining sector where a range of operational problems can put paid to future earnings projections. However, there are a couple of major reasons why I'm concerned about Sirius in particular.

Firstly, as I say, the initial fruits of its colossal project in the North of England are not expected until 2024. The lack of revenues from elsewhere means that the FTSE 250 digger is having to, well, dig deeper and deeper into its pockets to finance the project getting off the ground.

Cash resources fell to £468.5m as of December, from £665.3m a year earlier, as a result. And the company is to embark on stage 2 financing later in 2018. Shareholders have been assured by the direction of the mine-construction process so far but, should management's budget and timescale targets begin to slip, then investor sentiment may well begin to sour, a situation that would also adversely impact the terms on which it can secure future financing, of course.

I am also concerned about Sirius' lack of diversification. While many mining plays, such as BHP Billiton and Rio Tinto, have exposure to a variety of asset classes, Sirius has to hope that potash prices hold up well by the time its poly4 product hits the market in several years' time. Given the raft of new potash supply that is set to hit the market by then, this may turn out to be a hard ask.

Several of my Foolish colleagues have argued in recent weeks that Sirius' share price is a bargain right now. I can't help but buy into their optimism somewhat, given its success to date in building its giant hole in the ground, as well as the early successes of its commercial teams that has seen it secure supply agreements worth more than 4m tonnes per annum.

I'm yet to be seduced by Sirius given its uncertain earnings outlook and fragile balance sheet, however, and reckon there is no shortage of stocks with safer investment prospects that can be snapped up today.

Footsie dividend star

St James's Place (LSE: STJ) is one such share I reckon is worth checking out right now.

The FTSE 100 asset manager is going from strength to strength and, following the record amounts of new business it generated last year, it has kept up the pace into the start of 2018. Net inflows jumped 31% during January-March, to £2.6bn, and demand for its services looks set to keep growing as demand for financial services in the UK steadily increases.

Now City analysts expect St James's Place to endure a 7% earnings fall this year, but its long-term outlook remains robust and it's subsequently expected to come roaring back with an 18% bottom line improvement in 2019. Dividends are expected to keep climbing at a terrific rate, too, resulting in anticipated rewards of 48.7p and 56.7p per share for 2018 and 2019, respectively, projections that yield 4.2% and 4.9%.

A forward P/E ratio of 23.5 times may make it expensive on paper. Still, I reckon this valuation is undemanding given St James's Place improving status in a fast-growing marketplace.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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