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 157 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. 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.
BHP had positive earnings in each of the past 5 years.
In the past 5 years BHP always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.30%, BHP belongs to the top of the industry, outperforming 89.81% of the companies in the same industry.
The Return On Equity of BHP (25.02%) is better than 96.82% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.56%, BHP belongs to the top of the industry, outperforming 94.27% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BHP is significantly above the industry average of 11.71%.
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
BHP has a Profit Margin of 21.24%. This is amongst the best in the industry. BHP outperforms 89.81% of its industry peers.
BHP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 40.51%, BHP belongs to the top of the industry, outperforming 92.99% of the companies in the same industry.
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 93.63% 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so BHP is creating value.
The number of shares outstanding for BHP remains at a similar level compared to 1 year ago.
Compared to 5 years ago, BHP has more shares outstanding
BHP has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.38 indicates that BHP is not in any danger for bankruptcy at the moment.
The Altman-Z score of BHP (3.38) is better than 61.78% of its industry peers.
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.
The Debt to FCF ratio of BHP (1.95) is better than 81.53% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that BHP is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.43, BHP is doing worse than 73.89% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for BHP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.95 | ||
| Altman-Z | 3.38 |
ROIC/WACC1.64
WACC9.48%
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.
The Current ratio of BHP (1.70) is worse than 64.97% 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.
With a Quick ratio value of 1.25, BHP perfoms like the industry average, outperforming 42.04% 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
BHP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.09%.
The Earnings Per Share has been growing by 8.10% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to decrease by -9.81% on average over the next years.
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
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 10.87, 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 93.63% of the companies in the same industry.
BHP is valuated cheaply when we compare the Price/Earnings ratio to 28.05, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.65, which indicates a correct valuation of BHP.
BHP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BHP is cheaper than 68.79% of the companies in the same industry.
BHP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 37.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 12.65 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BHP is valued cheaper than 89.17% of the companies in the same industry.
BHP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. BHP is cheaper than 90.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.8 | ||
| EV/EBITDA | 5.34 |
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)1.34
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
5. Dividend
5.1 Amount
BHP has a Yearly Dividend Yield of 4.57%, which is a nice return.
BHP's Dividend Yield is rather good when compared to the industry average which is at 2.87. BHP pays more dividend than 93.63% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, BHP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.57% |
5.2 History
The dividend of BHP decreases each year by -7.16%.
BHP has been paying a dividend for at least 10 years, so it has 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%
52.28
-0.87 (-1.64%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners49.86%
Inst Owner Change1.42%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap132.65B
Analysts72.73
Price Target54.59 (4.42%)
Short Float %0.72%
Short Ratio5.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.57% |
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)-4.47%
PT rev (3m)-0.64%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 12.65 | ||
| P/S | 2.47 | ||
| P/FCF | 12.8 | ||
| P/OCF | 6.6 | ||
| P/B | 2.91 | ||
| P/tB | 3.03 | ||
| EV/EBITDA | 5.34 |
EPS(TTM)4.81
EY9.2%
EPS(NY)4.13
Fwd EY7.9%
FCF(TTM)4.08
FCFY7.81%
OCF(TTM)7.92
OCFY15.15%
SpS21.13
BVpS17.94
TBVpS17.24
PEG (NY)N/A
PEG (5Y)1.34
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 | 3.38 |
F-Score7
WACC9.48%
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-9.81%
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%