ASX:BHP

Stock Analysis Report

Executive Summary

BHP Group engages in the natural resources business worldwide.


Snowflake Analysis

Proven track record average 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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.5%

BHP

3.8%

AU Metals and Mining

0.3%

AU Market


1 Year Return

-24.6%

BHP

-21.2%

AU Metals and Mining

-22.9%

AU Market

Return vs Industry: BHP underperformed the Australian Metals and Mining industry which returned -21.2% over the past year.

Return vs Market: BHP underperformed the Australian Market which returned -22.9% over the past year.


Shareholder returns

BHPIndustryMarket
7 Day7.5%3.8%0.3%
30 Day-13.6%-19.5%-27.8%
90 Day-26.4%-25.1%-30.0%
1 Year-19.8%-24.6%-16.8%-21.2%-19.4%-22.9%
3 Year46.9%20.8%24.4%8.6%-8.3%-20.8%
5 Year35.3%-3.9%56.2%19.0%2.9%-20.3%

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?

19.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BHP (A$29.03) is trading below our estimate of fair value (A$36.23)

Significantly Below Fair Value: BHP is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: BHP is poor value based on its PE Ratio (9.5x) compared to the Metals and Mining industry average (7.2x).

PE vs Market: BHP is good value based on its PE Ratio (9.5x) compared to the Australian market (12.6x).


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 (1.9x) compared to the AU Metals and Mining industry average (1x).


Next Steps

Future Growth

How is BHP Group forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

-4.6%

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 (-4.6% per year).

Earnings vs Market: BHP's earnings are forecast to decline over the next 3 years (-4.6% 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 (-0.6% per year).

High Growth Revenue: BHP's revenue is forecast to decline over the next 3 years (-0.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BHP's Return on Equity is forecast to be low in 3 years time (15.8%).


Next Steps

Past Performance

How has BHP Group performed over the past 5 years?

37.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BHP has high quality earnings.

Growing Profit Margin: BHP's current net profit margins (20.5%) are higher than last year (20.2%).


Past Earnings Growth Analysis

Earnings Trend: BHP's earnings have grown significantly by 37.3% per year over the past 5 years.

Accelerating Growth: BHP's earnings growth over the past year (7%) is below its 5-year average (37.3% per year).

Earnings vs Industry: BHP earnings growth over the past year (7%) exceeded the Metals and Mining industry -7%.


Return on Equity

High ROE: BHP's Return on Equity (19.6%) is considered low.


Next Steps

Financial Health

How is BHP Group's financial position?


Financial Position Analysis

Short Term Liabilities: BHP's short term assets ($22.2B) exceed its short term liabilities ($13.8B).

Long Term Liabilities: BHP's short term assets ($22.2B) do not cover its long term liabilities ($36.1B).


Debt to Equity History and Analysis

Debt Level: BHP's debt to equity ratio (47.9%) is considered high.

Reducing Debt: BHP's debt to equity ratio has increased from 35% to 47.9% over the past 5 years.

Debt Coverage: BHP's debt is well covered by operating cash flow (71.9%).

Interest Coverage: BHP's interest payments on its debt are well covered by EBIT (30.8x coverage).


Balance Sheet

Inventory Level: BHP has a high level of physical assets or inventory.

Debt Coverage by Assets: BHP's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

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

8.03%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BHP's dividend (8.03%) is higher than the bottom 25% of dividend payers in the Australian market (3.35%).

High Dividend: BHP's dividend (8.03%) is low compared to the top 25% of dividend payers in the Australian market (8.5%).


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: At its current payout ratio (76.5%), BHP's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BHP's dividends in 3 years are forecast to be covered by earnings (70.7% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Mike Henry (53yo)

0.17

Tenure

US$4,734,000

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 since Februar ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD4.73M) is about average for companies of similar size in the Australian market ($USD4.14M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mike Henry
CEO & Executive Director0.17yrUS$4.73m0.0063% $8.5m
Peter Beaven
Chief Financial Officer5.42yrsUS$4.45m0.0094% $12.8m
Daniel Malchuk
President of Operations for Minerals Americas4.08yrsUS$4.38m0.0040% $5.5m
Geraldine Slattery
President of Operations Petroleum1yrUS$1.24m0.0014% $2.0m
Rag Udd
Acting Chief Technology Officer0.25yrno datano data
Adrian Wood
Head of Investor Relations5yrsno datano data
Caroline Cox
General Counsel & Group Company Secretary4yrsno datano data
James Agar
Vice President of Communicationsno datano datano data
Michiel Hovers
Group Sales & Marketing Officerno datano datano data
Athalie Williams
Chief People Officer5.17yrsUS$2.52mno data

4.0yrs

Average Tenure

49yo

Average Age

Experienced Management: BHP's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mike Henry
CEO & Executive Director0.17yrUS$4.73m0.0063% $8.5m
Ian Cockerill
Independent Non-Executive Director0.92yrUS$85.00k0.00024% $327.0k
Malcolm Broomhead
Independent Non-Executive Director10yrsUS$263.00k0.00038% $517.7k
Ken MacKenzie
Independent Chairman of the Board2.5yrsUS$912.00k0.0010% $1.4m
Susan Kilsby
Independent Non-Executive Director0.92yrUS$69.00k0.00014% $190.7k
Anita Frew
Independent Non-Executive Director4.5yrsUS$268.00k0.00030% $408.7k
Terence Bowen
Independent Non-Executive Director2.42yrsUS$223.00k0.00022% $299.7k
John Mogford
Independent Non-Executive Director2.42yrsUS$248.00k0.00024% $327.0k
Lindsay Maxsted
Independent Non-Executive Director9yrsUS$252.00k0.00036% $490.5k
Shriti Vadera
Senior Independent Director9.17yrsUS$301.00k0.00049% $667.6k

2.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: BHP's board of directors are not considered experienced ( 2.5 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: 1885
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$136.245b
  • Shares outstanding: 5.06b
  • Website: https://www.bhp.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BHPNYSE (New York Stock Exchange)ADR EACH REP 2 ORD NPV(MGT)USUSDDec 1972
BHP NBMV (Bolsa Mexicana de Valores)ADR EACH REP 2 ORD NPV(MGT)MXMXNDec 1972
BHPDB (Deutsche Boerse AG)ADR EACH REP 2 ORD NPV(MGT)DEEURDec 1972
0HN3LSE (London Stock Exchange)ADR EACH REP 2 ORD NPV(MGT)GBUSDDec 1972
BHPL.FOTCPK (Pink Sheets LLC)YesLTD Ordinary SharesUSUSDJan 1975
BHPASX (Australian Securities Exchange)YesLTD Ordinary SharesAUAUDJan 1975
BHP1DB (Deutsche Boerse AG)YesLTD Ordinary SharesDEEURJan 1975
BHPSWX (SIX Swiss Exchange)YesLTD Ordinary SharesCHCHFJan 1975
BHPCHIA (Chi-X Australia)YesLTD Ordinary SharesAUAUDJan 1975
BBLNYSE (New York Stock Exchange)SPONS ADR EACH REP 2 ORD USD0.50USUSDJul 2001
BHPB.FOTCPK (Pink Sheets LLC)PLC Ordinary SharesUSUSDJul 2001
BHPLSE (London Stock Exchange)PLC Ordinary SharesGBGBPJul 2001
BILDB (Deutsche Boerse AG)PLC Ordinary SharesDEEURJul 2001
BHPJSE (The Johannesburg Securities Exchange)PLC Ordinary SharesZAZARJul 2001
BILXTRA (XETRA Trading Platform)PLC Ordinary SharesDEEURJul 2001
BIL1DB (Deutsche Boerse AG)SPONS ADR EACH REP 2 ORD USD0.50DEEURJul 2001
BLTSWX (SIX Swiss Exchange)PLC Ordinary SharesCHCHFJul 2001

Biography

BHP Group engages in the natural resources business worldwide. It operates through Petroleum, Copper, Iron Ore, and Coal segments. The company engages in the exploration, development, and production of oil and gas properties; and mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. It is also involved in mining, smelting, and refining of nickel; the provision of towing, freight, marketing and trading, marketing support, finance, administrative, and other services; and potash development activities. BHP Group was incorporated in 1885 and is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 10:37
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.