BHP GROUP LTD-SPON ADR (BHP)

US0886061086 - ADR

56.58  -0.63 (-1.1%)

After market: 56.77 +0.19 (+0.34%)

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to BHP. BHP was compared to 156 industry peers in the Metals & Mining industry. BHP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. BHP has a bad growth rate and is valued cheaply. With these ratings, BHP could be worth investigating further for value investing!.



9

1. Profitability

1.1 Basic Checks

In the past year BHP was profitable.
BHP had a positive operating cash flow in the past year.
In the past 5 years BHP has always been profitable.
In the past 5 years BHP always reported a positive cash flow from operatings.

1.2 Ratios

BHP has a better Return On Assets (7.39%) than 81.41% of its industry peers.
With an excellent Return On Equity value of 17.86%, BHP belongs to the best of the industry, outperforming 88.46% of the companies in the same industry.
BHP's Return On Invested Capital of 15.30% is amongst the best of the industry. BHP outperforms 92.31% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BHP is significantly above the industry average of 8.94%.
The last Return On Invested Capital (15.30%) for BHP is well below the 3 year average (22.76%), which needs to be investigated, but indicates that BHP had better years and this may not be a problem.
Industry RankSector Rank
ROA 7.39%
ROE 17.86%
ROIC 15.3%
ROA(3y)18.53%
ROA(5y)14.27%
ROE(3y)39.94%
ROE(5y)30.81%
ROIC(3y)22.76%
ROIC(5y)18.26%

1.3 Margins

BHP has a better Profit Margin (13.36%) than 85.90% of its industry peers.
BHP's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 34.86%, BHP belongs to the top of the industry, outperforming 93.59% of the companies in the same industry.
BHP's Operating Margin has improved in the last couple of years.
BHP's Gross Margin of 56.70% is amongst the best of the industry. BHP outperforms 92.31% of its industry peers.
BHP's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 34.86%
PM (TTM) 13.36%
GM 56.7%
OM growth 3Y4.97%
OM growth 5Y2.13%
PM growth 3Y5.51%
PM growth 5Y22.82%
GM growth 3Y-0.43%
GM growth 5Y-1.09%

8

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so BHP is creating value.
BHP has about the same amout of shares outstanding than it did 1 year ago.
BHP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for BHP is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 3.29 indicates that BHP is not in any danger for bankruptcy at the moment.
BHP has a better Altman-Z score (3.29) than 62.18% of its industry peers.
BHP has a debt to FCF ratio of 1.86. This is a very positive value and a sign of high solvency as it would only need 1.86 years to pay back of all of its debts.
The Debt to FCF ratio of BHP (1.86) is better than 81.41% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that BHP is not too dependend on debt financing.
BHP has a Debt to Equity ratio of 0.47. This is in the lower half of the industry: BHP underperforms 74.36% of its industry peers.
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 RankSector Rank
Debt/Equity 0.47
Debt/FCF 1.86
Altman-Z 3.29
ROIC/WACC1.84
WACC8.3%

2.3 Liquidity

A Current Ratio of 1.57 indicates that BHP should not have too much problems paying its short term obligations.
BHP has a Current ratio of 1.57. This is in the lower half of the industry: BHP underperforms 70.51% of its industry peers.
BHP has a Quick Ratio of 1.22. 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 Quick ratio of 1.22. This is comparable to the rest of the industry: BHP outperforms 44.23% of its industry peers.
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 RankSector Rank
Current Ratio 1.57
Quick Ratio 1.22

1

3. Growth

3.1 Past

The earnings per share for BHP have decreased strongly by -26.47% in the last year.
BHP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.97% yearly.
BHP shows a decrease in Revenue. In the last year, the revenue decreased by -8.21%.
The Revenue has been growing slightly by 4.53% on average over the past years.
EPS 1Y (TTM)-26.47%
EPS 3Y13.96%
EPS 5Y7.97%
EPS Q2Q%-0.46%
Revenue 1Y (TTM)-8.21%
Revenue growth 3Y11.4%
Revenue growth 5Y4.53%
Sales Q2Q%5.91%

3.2 Future

Based on estimates for the next years, BHP will show a decrease in Earnings Per Share. The EPS will decrease by -6.51% on average per year.
The Revenue is expected to decrease by -2.57% on average over the next years.
EPS Next Y3.17%
EPS Next 2Y0.87%
EPS Next 3Y-1.73%
EPS Next 5Y-6.51%
Revenue Next Year0.43%
Revenue Next 2Y0.6%
Revenue Next 3Y-0.99%
Revenue Next 5Y-2.57%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

7

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 10.72, the valuation of BHP can be described as reasonable.
Based on the Price/Earnings ratio, BHP is valued cheaper than 82.69% of the companies in the same industry.
When comparing the Price/Earnings ratio of BHP to the average of the S&P500 Index (28.63), we can say BHP is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.50, the valuation of BHP can be described as very reasonable.
BHP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BHP is cheaper than 77.56% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.22, BHP is valued a bit cheaper.
Industry RankSector Rank
PE 10.72
Fwd PE 10.5

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BHP indicates a somewhat cheap valuation: BHP is cheaper than 74.36% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, BHP is valued cheaper than 84.62% of the companies in the same industry.
Industry RankSector Rank
P/FCF 11.94
EV/EBITDA 6.36

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BHP does not grow enough to justify the current Price/Earnings ratio.
BHP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.38
PEG (5Y)1.35
EPS Next 2Y0.87%
EPS Next 3Y-1.73%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.49%, BHP is a good candidate for dividend investing.
BHP's Dividend Yield is rather good when compared to the industry average which is at 2.96. BHP pays more dividend than 93.59% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, BHP pays a better dividend.
Industry RankSector Rank
Dividend Yield 5.49%

5.2 History

On average, the dividend of BHP grows each year by 21.73%, which is quite nice.
BHP has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)21.73%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

117.07% of the earnings are spent on dividend by BHP. This is not a sustainable payout ratio.
BHP's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP117.07%
EPS Next 2Y0.87%
EPS Next 3Y-1.73%

BHP GROUP LTD-SPON ADR

NYSE:BHP (6/21/2024, 7:04:00 PM)

After market: 56.77 +0.19 (+0.34%)

56.58

-0.63 (-1.1%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap143.47B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 5.49%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 10.72
Fwd PE 10.5
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.38
PEG (5Y)1.35
Profitability
Industry RankSector Rank
ROA 7.39%
ROE 17.86%
ROCE
ROIC
ROICexc
ROICexgc
OM 34.86%
PM (TTM) 13.36%
GM 56.7%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.55
Health
Industry RankSector Rank
Debt/Equity 0.47
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.57
Quick Ratio 1.22
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-26.47%
EPS 3Y13.96%
EPS 5Y
EPS Q2Q%
EPS Next Y3.17%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-8.21%
Revenue growth 3Y11.4%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y