ASX:BHP

Stock Analysis Report

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Market Cap

AU$138.9b

Last Updated

2021/06/24 08:02 UTC

Data Sources

Company Financials +

Executive Summary

BHP Group engages in the natural resources business in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and internationally. More Details


Snowflake Analysis

Excellent balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has BHP Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BHP is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: BHP's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-1.1%

BHP

-1.0%

AU Metals and Mining

-0.8%

AU Market


1 Year Return

34.6%

BHP

35.1%

AU Metals and Mining

29.1%

AU Market

Return vs Industry: BHP matched the Australian Metals and Mining industry which returned 31.2% over the past year.

Return vs Market: BHP exceeded the Australian Market which returned 26.8% over the past year.


Shareholder returns

BHPIndustryMarket
7 Day-1.1%-1.0%-0.8%
30 Day-0.7%-0.7%2.7%
90 Day4.6%6.2%6.7%
1 Year40.9%34.6%42.0%35.1%33.3%29.1%
3 Year70.1%39.4%66.3%42.9%32.9%17.2%
5 Year232.1%152.9%154.2%117.5%69.8%38.1%

Long-Term Price Volatility Vs. Market

How volatile is BHP Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is BHP Group undervalued compared to its fair value and its price relative to the market?

39.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BHP (A$47.16) is trading above our estimate of fair value (A$46.93)

Significantly Below Fair Value: BHP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BHP is poor value based on its PE Ratio (25.8x) compared to the Australian Metals and Mining industry average (11.9x).

PE vs Market: BHP is poor value based on its PE Ratio (25.8x) compared to the Australian market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: BHP's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: BHP is overvalued based on its PB Ratio (3.7x) compared to the AU Metals and Mining industry average (2.5x).


Future Growth

How is BHP Group forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

-8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BHP's earnings are forecast to decline over the next 3 years (-8.4% per year).

Earnings vs Market: BHP's earnings are forecast to decline over the next 3 years (-8.4% per year).

High Growth Earnings: BHP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: BHP's revenue is expected to decline over the next 3 years (-5.5% per year).

High Growth Revenue: BHP's revenue is forecast to decline over the next 3 years (-5.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BHP's Return on Equity is forecast to be high in 3 years time (22.4%)


Past Performance

How has BHP Group performed over the past 5 years?

39.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BHP has high quality earnings.

Growing Profit Margin: BHP's current net profit margins (15%) are lower than last year (20.7%).


Past Earnings Growth Analysis

Earnings Trend: BHP has become profitable over the past 5 years, growing earnings by 39.8% per year.

Accelerating Growth: BHP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BHP had negative earnings growth (-26.3%) over the past year, making it difficult to compare to the Metals and Mining industry average (26.1%).


Return on Equity

High ROE: BHP's Return on Equity (15.7%) is considered low.


Financial Health

How is BHP Group's financial position?


Financial Position Analysis

Short Term Liabilities: BHP's short term assets ($19.0B) exceed its short term liabilities ($13.4B).

Long Term Liabilities: BHP's short term assets ($19.0B) do not cover its long term liabilities ($36.4B).


Debt to Equity History and Analysis

Debt Level: BHP's debt to equity ratio (35.5%) is considered satisfactory.

Reducing Debt: BHP's debt to equity ratio has reduced from 58.9% to 35.5% over the past 5 years.

Debt Coverage: BHP's debt is well covered by operating cash flow (93.1%).

Interest Coverage: BHP's interest payments on its debt are well covered by EBIT (37.3x coverage).


Balance Sheet


Dividend

What is BHP Group current dividend yield, its reliability and sustainability?

4.36%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BHP's dividend (4.4%) is higher than the bottom 25% of dividend payers in the Australian market (1.99%).

High Dividend: BHP's dividend (4.4%) is low compared to the top 25% of dividend payers in the Australian market (5%).


Stability and Growth of Payments

Stable Dividend: BHP's dividend payments have been volatile in the past 10 years.

Growing Dividend: BHP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (113.3%), BHP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BHP's dividends in 3 years are forecast to be covered by earnings (74% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Mike Henry (54 yo)

1.42yrs

Tenure

US$6,033,000

Compensation

Mr. Mike P. Henry, BSc (Chem), has been the Chief Executive Officer and Executive Director of BHP Group since January 01, 2020 and served as its President of Operations for Minerals Australia(formerly know...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD6.03M) is above average for companies of similar size in the Australian market ($USD3.37M).

Compensation vs Earnings: Mike's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: BHP's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

Experienced Board: BHP's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

BHP Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BHP Group
  • Ticker: BHP
  • Exchange: ASX
  • Founded: 1851
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$138.915b
  • Shares outstanding: 2.95b
  • Website: https://www.bhp.com

Number of Employees


Location

  • BHP Group
  • 171 Collins Street
  • Level 18
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings


Biography

BHP Group engages in the natural resources business in Australia, Europe, China, Japan, India, South Korea, rest of Asia, North America, South America, and internationally. It operates through Petroleum, C...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/24 08:02
End of Day Share Price2021/06/23 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.