BHP GROUP LTD-SPON ADR (BHP) Stock Fundamental Analysis
NYSE:BHP - New York Stock Exchange, Inc. - US0886061086 - ADR - Currency: USD
BHP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 154 industry peers in the Metals & Mining industry. BHP gets an excellent profitability rating and is at the same time showing great financial health properties. BHP is valued quite cheap, but it does not seem to be growing. These ratings would make BHP suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year BHP was profitable.
BHP had a positive operating cash flow in the past year.
Each year in the past 5 years BHP has been profitable.
BHP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BHP has a Return On Assets of 11.30%. This is amongst the best in the industry. BHP outperforms 90.26% of its industry peers.
BHP's Return On Equity of 25.02% is amongst the best of the industry. BHP outperforms 96.10% of its industry peers.
BHP has a better Return On Invested Capital (15.56%) than 94.81% of its industry peers.
BHP had an Average Return On Invested Capital over the past 3 years of 20.35%. This is significantly above the industry average of 11.16%.
The last Return On Invested Capital (15.56%) for BHP is well below the 3 year average (20.35%), which needs to be investigated, but indicates that BHP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.3% | ||
| ROE | 25.02% | ||
| ROIC | 15.56% |
ROA(3y)17.65%
ROA(5y)14.17%
ROE(3y)38.46%
ROE(5y)30.81%
ROIC(3y)20.35%
ROIC(5y)18.16%
1.3 Margins
The Profit Margin of BHP (21.24%) is better than 90.26% of its industry peers.
In the last couple of years the Profit Margin of BHP has declined.
BHP has a Operating Margin of 40.51%. This is amongst the best in the industry. BHP outperforms 93.51% of its industry peers.
BHP's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 61.55%, BHP belongs to the best of the industry, outperforming 93.51% of the companies in the same industry.
In the last couple of years the Gross Margin of BHP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40.51% | ||
| PM (TTM) | 21.24% | ||
| GM | 61.55% |
OM growth 3Y-6.66%
OM growth 5Y2.08%
PM growth 3Y-10.6%
PM growth 5Y-5.43%
GM growth 3Y-3.92%
GM growth 5Y-0.42%
2. Health
2.1 Basic Checks
BHP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for BHP remains at a similar level compared to 1 year ago.
BHP has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, BHP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.25 indicates that BHP is not in any danger for bankruptcy at the moment.
BHP's Altman-Z score of 3.25 is fine compared to the rest of the industry. BHP outperforms 61.69% of its industry peers.
BHP has a debt to FCF ratio of 1.95. This is a very positive value and a sign of high solvency as it would only need 1.95 years to pay back of all of its debts.
BHP has a better Debt to FCF ratio (1.95) than 81.17% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that BHP is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.43, BHP is not doing good in the industry: 73.38% of the companies in the same industry are doing better.
Although BHP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.95 | ||
| Altman-Z | 3.25 |
ROIC/WACC1.64
WACC9.51%
2.3 Liquidity
BHP has a Current Ratio of 1.70. This is a normal value and indicates that BHP is financially healthy and should not expect problems in meeting its short term obligations.
BHP has a Current ratio of 1.70. This is in the lower half of the industry: BHP underperforms 65.58% of its industry peers.
BHP has a Quick Ratio of 1.25. This is a normal value and indicates that BHP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.25, BHP is in line with its industry, outperforming 43.51% of the companies in the same industry.
BHP does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
The earnings per share for BHP have decreased by -9.09% in the last year.
BHP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.10% yearly.
BHP shows a decrease in Revenue. In the last year, the revenue decreased by -3.13%.
Measured over the past years, BHP shows a small growth in Revenue. The Revenue has been growing by 4.68% on average per year.
EPS 1Y (TTM)-9.09%
EPS 3Y-7.23%
EPS 5Y8.1%
EPS Q2Q%-22.57%
Revenue 1Y (TTM)-3.13%
Revenue growth 3Y-0.75%
Revenue growth 5Y4.68%
Sales Q2Q%-7.55%
3.2 Future
The Earnings Per Share is expected to decrease by -9.70% on average over the next years.
The Revenue is expected to decrease by -0.49% on average over the next years.
EPS Next Y-19.99%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
EPS Next 5Y-9.7%
Revenue Next Year-9.43%
Revenue Next 2Y-5.93%
Revenue Next 3Y-4.32%
Revenue Next 5Y-0.49%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 10.21, which indicates a very decent valuation of BHP.
BHP's Price/Earnings ratio is rather cheap when compared to the industry. BHP is cheaper than 95.45% of the companies in the same industry.
BHP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.43.
Based on the Price/Forward Earnings ratio of 11.88, the valuation of BHP can be described as reasonable.
68.18% of the companies in the same industry are more expensive than BHP, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.17, BHP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 11.88 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BHP indicates a rather cheap valuation: BHP is cheaper than 88.96% of the companies listed in the same industry.
BHP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. BHP is cheaper than 89.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.02 | ||
| EV/EBITDA | 4.92 |
4.3 Compensation for Growth
BHP has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as BHP's earnings are expected to decrease with -8.75% in the coming years.
PEG (NY)N/A
PEG (5Y)1.26
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
5. Dividend
5.1 Amount
BHP has a Yearly Dividend Yield of 4.98%, which is a nice return.
Compared to an average industry Dividend Yield of 2.97, BHP pays a better dividend. On top of this BHP pays more dividend than 92.86% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, BHP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.98% |
5.2 History
The dividend of BHP decreases each year by -7.16%.
BHP has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-7.16%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
65.83% of the earnings are spent on dividend by BHP. This is not a sustainable payout ratio.
BHP's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP65.83%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
49.1
+0.5 (+1.03%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners48.9%
Inst Owner Change5.9%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap124.58B
Analysts74.55
Price Target56.02 (14.09%)
Short Float %0.63%
Short Ratio4.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.98% |
Yearly Dividend1.51
Dividend Growth(5Y)-7.16%
DP65.83%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.95%
PT rev (3m)-3.38%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 11.88 | ||
| P/S | 2.32 | ||
| P/FCF | 12.02 | ||
| P/OCF | 6.2 | ||
| P/B | 2.74 | ||
| P/tB | 2.85 | ||
| EV/EBITDA | 4.92 |
EPS(TTM)4.81
EY9.8%
EPS(NY)4.13
Fwd EY8.41%
FCF(TTM)4.08
FCFY8.32%
OCF(TTM)7.92
OCFY16.13%
SpS21.13
BVpS17.94
TBVpS17.24
PEG (NY)N/A
PEG (5Y)1.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.3% | ||
| ROE | 25.02% | ||
| ROCE | 24.56% | ||
| ROIC | 15.56% | ||
| ROICexc | 17.57% | ||
| ROICexgc | 17.97% | ||
| OM | 40.51% | ||
| PM (TTM) | 21.24% | ||
| GM | 61.55% | ||
| FCFM | 19.34% |
ROA(3y)17.65%
ROA(5y)14.17%
ROE(3y)38.46%
ROE(5y)30.81%
ROIC(3y)20.35%
ROIC(5y)18.16%
ROICexc(3y)24.85%
ROICexc(5y)21.99%
ROICexgc(3y)25.42%
ROICexgc(5y)22.48%
ROCE(3y)32.1%
ROCE(5y)28.66%
ROICexcg growth 3Y-6.53%
ROICexcg growth 5Y6.4%
ROICexc growth 3Y-6.66%
ROICexc growth 5Y6.1%
OM growth 3Y-6.66%
OM growth 5Y2.08%
PM growth 3Y-10.6%
PM growth 5Y-5.43%
GM growth 3Y-3.92%
GM growth 5Y-0.42%
F-Score7
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.95 | ||
| Debt/EBITDA | 0.73 | ||
| Cap/Depr | 183.18% | ||
| Cap/Sales | 18.16% | ||
| Interest Coverage | 13.09 | ||
| Cash Conversion | 74.36% | ||
| Profit Quality | 91.02% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z | 3.25 |
F-Score7
WACC9.51%
ROIC/WACC1.64
Cap/Depr(3y)140.87%
Cap/Depr(5y)130.39%
Cap/Sales(3y)13.07%
Cap/Sales(5y)14.27%
Profit Quality(3y)106.17%
Profit Quality(5y)119.57%
High Growth Momentum
Growth
EPS 1Y (TTM)-9.09%
EPS 3Y-7.23%
EPS 5Y8.1%
EPS Q2Q%-22.57%
EPS Next Y-19.99%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
EPS Next 5Y-9.7%
Revenue 1Y (TTM)-3.13%
Revenue growth 3Y-0.75%
Revenue growth 5Y4.68%
Sales Q2Q%-7.55%
Revenue Next Year-9.43%
Revenue Next 2Y-5.93%
Revenue Next 3Y-4.32%
Revenue Next 5Y-0.49%
EBIT growth 1Y12.57%
EBIT growth 3Y-7.36%
EBIT growth 5Y6.86%
EBIT Next Year14.28%
EBIT Next 3Y3.9%
EBIT Next 5Y1.64%
FCF growth 1Y-46.59%
FCF growth 3Y-17.26%
FCF growth 5Y1.17%
OCF growth 1Y-21.69%
OCF growth 3Y-8.79%
OCF growth 5Y2.95%