BHP GROUP LTD-SPON ADR (BHP) Stock Fundamental Analysis
NYSE:BHP - New York Stock Exchange, Inc. - US0886061086 - ADR - Currency: USD
We assign a fundamental rating of 6 out of 10 to BHP. BHP was compared to 154 industry peers in the Metals & Mining industry. Both the health and profitability get an excellent rating, making BHP a very profitable company, without any liquidiy or solvency issues. BHP is valued quite cheap, but it does not seem to be growing. With these ratings, BHP could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
BHP had positive earnings in the past year.
BHP had a positive operating cash flow in the past year.
In the past 5 years BHP has always been profitable.
BHP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.30%, BHP belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
With an excellent Return On Equity value of 25.02%, BHP belongs to the best of the industry, outperforming 96.10% of the companies in the same industry.
BHP has a better Return On Invested Capital (15.56%) than 94.81% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BHP is significantly above the industry average of 11.67%.
The 3 year average ROIC (20.35%) for BHP is well above the current ROIC(15.56%). The reason for the recent decline needs to be investigated.
| 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
With an excellent Profit Margin value of 21.24%, BHP belongs to the best of the industry, outperforming 90.26% of the companies in the same industry.
BHP's Profit Margin has declined in the last couple of years.
The Operating Margin of BHP (40.51%) is better than 92.86% of its industry peers.
In the last couple of years the Operating Margin of BHP has grown nicely.
Looking at the Gross Margin, with a value of 61.55%, BHP belongs to the top 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), BHP is creating value.
Compared to 1 year ago, BHP has about the same amount of shares outstanding.
BHP has more shares outstanding than it did 5 years ago.
BHP has a better debt/assets ratio than last year.
2.2 Solvency
BHP has an Altman-Z score of 3.25. This indicates that BHP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.25, BHP is in the better half of the industry, outperforming 61.04% of the companies in the same industry.
The Debt to FCF ratio of BHP is 1.95, which is an excellent value as it means it would take BHP, only 1.95 years of fcf income to pay off all of its debts.
BHP has a better Debt to FCF ratio (1.95) than 81.82% of its industry peers.
BHP has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
BHP has a Debt to Equity ratio of 0.43. This is in the lower half of the industry: BHP underperforms 74.03% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.95 | ||
| Altman-Z | 3.25 |
ROIC/WACC1.77
WACC8.81%
2.3 Liquidity
A Current Ratio of 1.70 indicates that BHP should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.70, BHP is doing worse than 65.58% of the companies in the same industry.
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.
With a Quick ratio value of 1.25, BHP perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
The current and quick ratio evaluation for BHP is rather negative, while it does have 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.
Looking at the last year, BHP shows a decrease in Revenue. The Revenue has decreased by -3.13% in the last year.
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
Based on estimates for the next years, BHP will show a decrease in Earnings Per Share. The EPS will decrease by -9.81% on average per year.
Based on estimates for the next years, BHP will show a decrease in Revenue. The Revenue will decrease by -0.48% on average per year.
EPS Next Y-19.99%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
EPS Next 5Y-9.81%
Revenue Next Year-9.43%
Revenue Next 2Y-5.93%
Revenue Next 3Y-4.32%
Revenue Next 5Y-0.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
BHP is valuated reasonably with a Price/Earnings ratio of 10.12.
BHP's Price/Earnings ratio is rather cheap when compared to the industry. BHP is cheaper than 94.81% of the companies in the same industry.
BHP is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.78, the valuation of BHP can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BHP indicates a somewhat cheap valuation: BHP is cheaper than 69.48% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.70, BHP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.12 | ||
| Fwd PE | 11.78 |
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 90.26% 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 | 11.92 | ||
| EV/EBITDA | 4.92 |
4.3 Compensation for Growth
The excellent profitability rating of BHP 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)1.25
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
5. Dividend
5.1 Amount
BHP has a Yearly Dividend Yield of 5.26%, which is a nice return.
BHP's Dividend Yield is rather good when compared to the industry average which is at 2.98. BHP pays more dividend than 93.51% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, BHP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.26% |
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
BHP pays out 65.83% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of BHP has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP65.83%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
48.67
+0.58 (+1.21%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners49.86%
Inst Owner Change5.9%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap123.49B
Analysts72.73
Price Target57.15 (17.42%)
Short Float %0.62%
Short Ratio5.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.26% |
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)2.01%
PT rev (3m)-1.14%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)1.63%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.12 | ||
| Fwd PE | 11.78 | ||
| P/S | 2.3 | ||
| P/FCF | 11.92 | ||
| P/OCF | 6.14 | ||
| P/B | 2.71 | ||
| P/tB | 2.82 | ||
| EV/EBITDA | 4.92 |
EPS(TTM)4.81
EY9.88%
EPS(NY)4.13
Fwd EY8.49%
FCF(TTM)4.08
FCFY8.39%
OCF(TTM)7.92
OCFY16.27%
SpS21.13
BVpS17.94
TBVpS17.24
PEG (NY)N/A
PEG (5Y)1.25
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
WACC8.81%
ROIC/WACC1.77
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-9.81%
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-0.48%
EBIT growth 1Y12.57%
EBIT growth 3Y-7.36%
EBIT growth 5Y6.86%
EBIT Next Year14.28%
EBIT Next 3Y3.9%
EBIT Next 5Y1.78%
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%