ASX:BHP

Stock Analysis Report

Executive Summary

BHP Group engages in the natural resources business worldwide.

Rewards

PE ratio (16.6x) is below the Australian market (18.9x)

Earnings grew by 30.4% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -1.3% per year for the next 3 years

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.4%

BHP

2.5%

AU Metals and Mining

0.6%

AU Market


1 Year Return

22.4%

BHP

27.5%

AU Metals and Mining

20.2%

AU Market

Return vs Industry: BHP underperformed the Australian Metals and Mining industry which returned 27.9% over the past year.

Return vs Market: BHP exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

BHPIndustryMarket
7 Day-0.4%2.5%0.6%
30 Day3.1%6.2%4.3%
90 Day13.1%12.9%4.9%
1 Year29.0%22.4%33.9%27.5%25.6%20.2%
3 Year77.3%47.0%58.6%38.9%39.4%20.7%
5 Year93.9%38.2%115.7%65.9%60.8%24.6%

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?

16.57x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BHP (A$40.18) is trading above our estimate of fair value (A$32.66)

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 (16.6x) compared to the Metals and Mining industry average (13.2x).

PE vs Market: BHP is good value based on its PE Ratio (16.6x) compared to the Australian market (18.9x).


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 (3x) compared to the AU Metals and Mining industry average (1.5x).


Next Steps

Future Growth

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

-1.1%

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 (-1.3% per year).

Earnings vs Market: BHP's earnings are forecast to decline over the next 3 years (-1.3% 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 (-1.3% per year).

High Growth Revenue: BHP's revenue is forecast to decline over the next 3 years (-1.3% 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 (17.1%).


Next Steps

  • Explore growth companies in the Materials industry.

Past Performance

How has BHP Group performed over the past 5 years?

8.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BHP has high quality earnings.

Growing Profit Margin: BHP's current net profit margins (19.4%) are higher than last year (15.3%).


Past Earnings Growth Analysis

Earnings Trend: BHP's earnings have grown by 8.9% per year over the past 5 years.

Accelerating Growth: BHP's earnings growth over the past year (30.4%) exceeds its 5-year average (8.9% per year).

Earnings vs Industry: BHP earnings growth over the past year (30.4%) exceeded the Metals and Mining industry 7.8%.


Return on Equity

High ROE: BHP's Return on Equity (18.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is BHP Group's financial position?


Financial Position Analysis

Short Term Liabilities: BHP's short term assets ($23.4B) exceed its short term liabilities ($12.3B).

Long Term Liabilities: BHP's short term assets ($23.4B) do not cover its long term liabilities ($36.7B).


Debt to Equity History and Analysis

Debt Level: BHP's debt to equity ratio (48.4%) is considered high.

Reducing Debt: BHP's debt to equity ratio has increased from 39.2% to 48.4% over the past 5 years.

Debt Coverage: BHP's debt is well covered by operating cash flow (71.3%).

Interest Coverage: BHP's interest payments on its debt are well covered by EBIT (25.3x 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?

4.81%

Current Dividend Yield


Dividend Yield vs Market

company4.8%marketbottom25%2.3%markettop25%5.6%industryaverage4.2%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: BHP's dividend (4.8%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: BHP's dividend (4.8%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


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 (79.7%), 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 (64.7% payout ratio).


Next Steps

Management

What is the CEO of BHP Group's salary, the management and board of directors tenure and is there insider trading?

3.9yrs

Average management tenure


CEO

Mike Henry (53yo)

0yrs

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 ($USD4.73M) is about average for companies of similar size in the Australian market ($USD3.87M).

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


Management Age and Tenure

3.9yrs

Average Tenure

49yo

Average Age

Experienced Management: BHP's management team is considered experienced (3.9 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

61.5yo

Average Age

Experienced Board: BHP's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

SellAU$1,119,29725 Aug 19
Andrew Mackenzie
EntityIndividual
Shares31,309
Max PriceAU$35.75

Ownership Breakdown

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


Management Team

  • Peter Beaven (52yo)

    Chief Financial Officer

    • Tenure: 5.3yrs
    • Compensation: US$4.45m
  • Adrian Wood (45yo)

    Head of Investor Relations

    • Tenure: 4.9yrs
  • Mike Henry (53yo)

    CEO & Executive Director

    • Compensation: US$4.73m
  • Danny Malchuk (53yo)

    President of Operations for Minerals Americas

    • Tenure: 3.9yrs
    • Compensation: US$4.38m
  • Athalie Williams (49yo)

    Chief People Officer

    • Tenure: 5yrs
    • Compensation: US$2.52m
  • Caroline Cox (48yo)

    General Counsel & Group Company Secretary

    • Tenure: 3.8yrs
  • Geraldine Slattery (49yo)

    President of Operations Petroleum

    • Tenure: 0.8yrs
    • Compensation: US$1.24m
  • James Agar

    Vice President of Communications

    • Rag Udd

      Acting Chief Technology Officer

      • Tenure: 0.08yrs
    • Michiel Hovers

      Group Sales & Marketing Officer


      Board Members

      • Ian Cockerill (64yo)

        Independent Non-Executive Director

        • Tenure: 0.8yrs
        • Compensation: US$85.00k
      • Malcolm Broomhead (67yo)

        Independent Non-Executive Director

        • Tenure: 9.8yrs
        • Compensation: US$263.00k
      • Ken MacKenzie (55yo)

        Independent Chairman of the Board

        • Tenure: 2.3yrs
        • Compensation: US$912.00k
      • Susan Kilsby (61yo)

        Independent Non-Executive Director

        • Tenure: 0.8yrs
        • Compensation: US$69.00k
      • Anita Frew (62yo)

        Independent Non-Executive Director

        • Tenure: 4.3yrs
        • Compensation: US$268.00k
      • Terry Bowen (52yo)

        Independent Non-Executive Director

        • Tenure: 2.3yrs
        • Compensation: US$223.00k
      • John Mogford (66yo)

        Independent Non-Executive Director

        • Tenure: 2.3yrs
        • Compensation: US$248.00k
      • Lindsay Maxsted (65yo)

        Independent Non-Executive Director

        • Tenure: 8.8yrs
        • Compensation: US$252.00k
      • Shriti Vadera (57yo)

        Senior Independent Director

        • Tenure: 9yrs
        • Compensation: US$301.00k
      • Mike Henry (53yo)

        CEO & Executive Director

        • Compensation: US$4.73m

      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$192.962b
      • 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)SPONSORED ADSUSUSDDec 1972
      0HN3LSE (London Stock Exchange)SPONSORED ADSGBUSDDec 1972
      BHPDB (Deutsche Boerse AG)SPONSORED ADSDEEURDec 1972
      BHP NBMV (Bolsa Mexicana de Valores)SPONSORED ADSMXMXNDec 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
      BILXTRA (XETRA Trading Platform)PLC Ordinary SharesDEEURJul 2001
      BILDB (Deutsche Boerse AG)PLC Ordinary SharesDEEURJul 2001
      BHPLSE (London Stock Exchange)PLC Ordinary SharesGBGBPJul 2001
      BIL1DB (Deutsche Boerse AG)SPONSORED ADRDEEURJul 2001
      BBLNYSE (New York Stock Exchange)SPONSORED ADRUSUSDJul 2001
      BHPB.FOTCPK (Pink Sheets LLC)PLC Ordinary SharesUSUSDJul 2001
      BLTSWX (SIX Swiss Exchange)PLC Ordinary SharesCHCHFJul 2001
      BHPJSE (The Johannesburg Securities Exchange)PLC Ordinary SharesZAZARJul 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 Analysis2020/01/24 10:34
      End of Day Share Price2020/01/24 00:00
      Earnings2019/06/30
      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.