It came as no surprise that raw materials producers BHP Billiton (LSE: BLT) and Tullow Oil (LSE: TLW) sunk to fresh multi-year lows in January as metal and energy prices suffered further weakness.

Shares have received a slight bump in recent days as bargain hunters have piled in. But even at current prices I do not believe either firm can be considered cheap, and fully expect both firms to resume their downward spiral sooner rather than later as collapsing commodity prices weigh.

Earnings under pressure

Indeed, the effect of intensifying earnings pressure is expected to drive earnings at BHP Billiton through the floor in the year to June 2016 — a 60% slide is currently predicted by the City, leaving the company changing hands on a frankly-barmy P/E rating of 24 times.

Valuations are not much better at Tullow Oil, either, even though earnings forecasts maintain an upward trajectory. Projected earnings of 1.1p per share for 2015 are anticipated to explode to 10p this year, although this still results in an elevated earnings multiple of 24.8 times.

 I would consider a reading of 10 times or below to be a fairer reflection of both BHP Billiton’s and Tullow Oil’s earnings prospects, territory usually associated with ultra-risky stocks.

And I would consider neither stock to be anything more than a ‘punt’ at the present time. Latest manufacturing data from China this week gave speculation of an economic ‘hard landing’ fresh fuel, a scenario that spells more trouble for the commodities sector.

Furthermore, the likelihood of growing dollar strength in 2016 and potentially beyond spells further trouble for the likes of Tullow Oil and BHP Billiton.

Will the dividend save the day?

In the case of BHP Billiton, I certainly believe that the share price remains buoyed by robust appetite from income hunters.

The mining giant has remained a dependable dividend pick even in spite of heavy earnings turbulence — BHP Billiton has seen earnings fall by vast double-digit percentages during three of the past five years. Despite these pressures, the company has still managed to lift the payout at an annualised rate of 5.3% since 2011.

The City expects this stellar run to come to an end in the current period, however, with last year’s payout of 124 US cents per share expected to fall to 110 cents in 2016. Still, this will not be enough to put off many income investors thanks to the colossal 9.8% yield.

But I believe that current projections may fall woefully short of estimates, particularly as commodity prices remain in danger of sliding right through to the end of BHP Billiton’s fiscal year in June and potentially beyond.

Firstly, BHP Billiton is expected to generate earnings of just 77 cents per share this year, falling some distance short of the forecasted dividend.

And the company cannot rely on cost-cutting schemes and asset sales to finance shareholder payouts in the near-term. Just this week Standard & Poor’s cut its credit rating on BHP Billiton by one notch, underlining the dire state of the firm’s balance sheet.

And payouts are unlikely to trek higher again while overabundant supplies pressure commodity values.

Until demand indicators begin to improve, and major producers across the metals and energy sectors get a handle on runaway supply levels, I believe investors should be braced for much more pain at Tullow Oil and BHP Billiton.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Tullow Oil. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.