It’s not often that a $364m pre-tax loss in six months and 23% fall in underlying earnings sends a company’s shares rocketing 6%, but that’s the case today for Anglo American (LSE: AAL). The market was obviously expecting worse from the embattled miner’s past half year but the main reason shares are up is that management reported the company is on track to meet its target of reducing net debt to under $10bn by year end.

While this is great news, it still doesn’t mean I’m any closer to buying shares. That’s because net debt down to $11.7bn still represents a gearing ratio of 35.4%. This is a massive amount of debt compared to healthier competitors such as Rio Tinto and BHP Billiton.

Debt of this level means dividends, which were suspended late last year, are likely to remain non-existent for some time to come. Without any appreciable income potential in the coming quarters can investors at least expect share price growth?

I remain doubtful. Prices for platinum and copper, two of Anglo’s three main products alongside diamonds, continue to fall and have little prospect for a major reversal in the coming years. The global market for these commodities is still oversupplied as Chinese demand falls and new mines continue to come online.

Without the traditional attraction of high dividends, this lack of growth makes investing in Anglo American right now a non-starter for me when there are better long-term options out there in the commodities sector.

Sky’s the limit

The past year has been much kinder to Sky (LSE: SKY) who added over 800,000 subscribers and increased operating profits by 12%. Improved cash flow also allowed the company to increase dividends by 2% while maintaining a healthy 1.8 times coverage from adjusted earnings. The market has understandably received this news well and boosted shares by over 5% in early trading.

The company is also making progress in cutting down on debt loaded on to complete its acquisitions of Sky Italia and Sky Deutschland. Discounting the dramatic swing in the pound following the EU Referendum, its net debt-to-EBITDA ratio fell from 2.6 to 2.4 times.

Looking ahead, Sky isn’t resting on its laurels as the largest pay-TV provider in the UK and is expanding into mobile phone service in order to offer highly profitable and relatively low-churn quad-play packages of TV, broadband, mobile and landline. Enticing customers to sign up to these extra services will be critical if the effects of cord-cutting are as extreme as some analysts believe.

Of course, Sky is showing few ill effects so far having added over 800,000 customers in the year. Maintaining the bulk of Premier League rights, even with their eye-watering price, certainly played a large role in this and will continue to do so in the coming years. With impressive premium options such as HBO, the rights to major sports and improved financial metrics across the board, Sky is looking like a bargain at 15 times forward earnings and a 3.6% yielding dividend.

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This under-the-radar dividend champion has increased dividends over 400% in the past four years and with three times earnings coverage, expect shareholder returns to outstrip competitors for years to come.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Rio Tinto and Sky. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.