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 152 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 is valued quite cheap, but it does not seem to be growing. These ratings could make BHP a good candidate 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.
In the past 5 years BHP has always been profitable.
Each year in the past 5 years BHP had a positive operating cash flow.
1.2 Ratios
BHP has a Return On Assets of 11.30%. This is amongst the best in the industry. BHP outperforms 90.79% of its industry peers.
BHP's Return On Equity of 25.02% is amongst the best of the industry. BHP outperforms 96.05% 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 94.74% 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 8.55%.
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
The Profit Margin of BHP (21.24%) is better than 89.47% 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 94.08% 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 92.76% of the companies in the same industry.
BHP's Gross Margin has been stable in the last couple of years.
| 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.
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 3.19. This indicates that BHP is financially healthy and has little risk of bankruptcy at the moment.
BHP has a better Altman-Z score (3.19) than 61.84% 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.
BHP's Debt to FCF ratio of 1.95 is amongst the best of the industry. BHP outperforms 81.58% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that BHP is not too dependend on debt financing.
BHP has a worse Debt to Equity ratio (0.43) than 72.37% of its industry peers.
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 | 3.19 |
ROIC/WACC1.55
WACC10.03%
2.3 Liquidity
A Current Ratio of 1.70 indicates that BHP should not have too much problems paying its short term obligations.
BHP has a worse Current ratio (1.70) than 64.47% 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 43.42% 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
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.
BHP shows a decrease in Revenue. In the last year, the revenue decreased by -3.13%.
The Revenue has been growing slightly by 4.68% on average over the past years.
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
BHP is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -9.70% yearly.
Based on estimates for the next years, BHP will show a decrease in Revenue. The Revenue will decrease by -0.49% on average per year.
EPS Next Y-19.99%
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
EPS Next 5Y-9.7%
Revenue Next Year-9.58%
Revenue Next 2Y-5.17%
Revenue Next 3Y-4.47%
Revenue Next 5Y-0.49%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.67 indicates a reasonable valuation of BHP.
92.76% of the companies in the same industry are more expensive than BHP, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. BHP is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 11.25, which indicates a very decent valuation of BHP.
Based on the Price/Forward Earnings ratio, BHP is valued cheaper than 82.24% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.32. BHP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 11.25 |
4.2 Price Multiples
89.47% of the companies in the same industry are more expensive than BHP, based on the Enterprise Value to EBITDA ratio.
89.47% of the companies in the same industry are more expensive than BHP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.38 | ||
| EV/EBITDA | 4.72 |
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)1.19
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
5. Dividend
5.1 Amount
BHP has a Yearly Dividend Yield of 5.21%, which is a nice return.
BHP's Dividend Yield is rather good when compared to the industry average which is at 2.99. BHP pays more dividend than 92.76% of the companies in the same industry.
BHP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.21% |
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%
46.49
+0.86 (+1.88%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners48.9%
Inst Owner Change0.05%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap117.96B
Analysts73.64
Price Target57.26 (23.17%)
Short Float %0.44%
Short Ratio4.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.21% |
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)3.34%
PT rev (3m)-0.77%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)1.33%
EPS NY rev (3m)-6.76%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 11.25 | ||
| P/S | 2.2 | ||
| P/FCF | 11.38 | ||
| P/OCF | 5.87 | ||
| P/B | 2.59 | ||
| P/tB | 2.7 | ||
| EV/EBITDA | 4.72 |
EPS(TTM)4.81
EY10.35%
EPS(NY)4.13
Fwd EY8.89%
FCF(TTM)4.08
FCFY8.79%
OCF(TTM)7.92
OCFY17.04%
SpS21.13
BVpS17.94
TBVpS17.24
PEG (NY)N/A
PEG (5Y)1.19
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 | 3.19 |
F-Score7
WACC10.03%
ROIC/WACC1.55
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-9.58%
Revenue Next 2Y-5.17%
Revenue Next 3Y-4.47%
Revenue Next 5Y-0.49%
EBIT growth 1Y12.57%
EBIT growth 3Y-7.36%
EBIT growth 5Y6.86%
EBIT Next Year14.28%
EBIT Next 3Y3.4%
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%