BHP GROUP LTD-SPON ADR (BHP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BHP - US0886061086 - ADR
69.735 USD
+1.97 (+2.9%)
We assign a fundamental rating of 5 out of 10 to BHP. BHP was compared to 154 industry peers in the Metals & Mining industry. BHP scores excellent on profitability, but there are some minor concerns on its financial health. BHP has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year BHP was profitable.
- In the past year BHP had a positive cash flow from operations.
- 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
- Looking at the Return On Assets, with a value of 8.29%, BHP belongs to the top of the industry, outperforming 83.77% of the companies in the same industry.
- With an excellent Return On Equity value of 18.92%, BHP belongs to the best of the industry, outperforming 91.56% of the companies in the same industry.
- The Return On Invested Capital of BHP (12.49%) is better than 85.06% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for BHP is above the industry average of 10.32%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.29% | ||
| ROE | 18.92% | ||
| ROIC | 12.49% |
ROA(3y)9.59%
ROA(5y)14.32%
ROE(3y)21.86%
ROE(5y)31.27%
ROIC(3y)14.98%
ROIC(5y)17.95%
1.3 Margins
- The Profit Margin of BHP (17.59%) is better than 81.17% of its industry peers.
- In the last couple of years the Profit Margin of BHP has declined.
- With an excellent Operating Margin value of 37.67%, BHP belongs to the best of the industry, outperforming 88.31% of the companies in the same industry.
- In the last couple of years the Operating Margin of BHP has remained more or less at the same level.
- BHP's Gross Margin of 56.70% is amongst the best of the industry. BHP outperforms 89.61% of its industry peers.
- 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 | 37.67% | ||
| PM (TTM) | 17.59% | ||
| GM | 56.7% |
OM growth 3Y-9.43%
OM growth 5Y1.25%
PM growth 3Y-28.17%
PM growth 5Y-2.95%
GM growth 3Y-5.52%
GM growth 5Y-0.81%
2. Health
2.1 Basic Checks
- BHP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some 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.
- BHP has a worse debt/assets ratio than last year.
2.2 Solvency
- BHP has an Altman-Z score of 3.37. 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 3.37, BHP is in line with its industry, outperforming 45.45% of the companies in the same industry.
- The Debt to FCF ratio of BHP is 2.75, which is a good value as it means it would take BHP, 2.75 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 2.75, BHP is doing good in the industry, outperforming 75.32% of the companies in the same industry.
- A Debt/Equity ratio of 0.47 indicates that BHP is not too dependend on debt financing.
- With a Debt to Equity ratio value of 0.47, BHP is not doing good in the industry: 74.03% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 2.75 | ||
| Altman-Z | 3.37 |
ROIC/WACC1.17
WACC10.71%
2.3 Liquidity
- A Current Ratio of 1.46 indicates that BHP should not have too much problems paying its short term obligations.
- BHP's Current ratio of 1.46 is on the low side compared to the rest of the industry. BHP is outperformed by 72.08% of its industry peers.
- BHP has a Quick Ratio of 1.11. 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 1.11, BHP is not doing good in the industry: 62.99% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.46 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- BHP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.60%.
- Measured over the past 5 years, BHP shows a small growth in Earnings Per Share. The EPS has been growing by 2.30% on average per year.
- The Revenue has decreased by -7.90% in the past year.
- The Revenue has been growing slightly by 5.66% on average over the past years.
EPS 1Y (TTM)-25.6%
EPS 3Y-21.91%
EPS 5Y2.3%
EPS Q2Q%-28.42%
Revenue 1Y (TTM)-7.9%
Revenue growth 3Y-7.66%
Revenue growth 5Y5.66%
Sales Q2Q%-8.23%
3.2 Future
- The Earnings Per Share is expected to decrease by -1.69% on average over the next years.
- Based on estimates for the next years, BHP will show a small growth in Revenue. The Revenue will grow by 0.08% on average per year.
EPS Next Y16.85%
EPS Next 2Y5.34%
EPS Next 3Y3.79%
EPS Next 5Y-1.69%
Revenue Next Year0.84%
Revenue Next 2Y-0.92%
Revenue Next 3Y-0.07%
Revenue Next 5Y0.08%
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.
4. Valuation
4.1 Price/Earnings Ratio
- BHP is valuated rather expensively with a Price/Earnings ratio of 17.39.
- 92.21% of the companies in the same industry are more expensive than BHP, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of BHP to the average of the S&P500 Index (27.25), we can say BHP is valued slightly cheaper.
- BHP is valuated correctly with a Price/Forward Earnings ratio of 14.89.
- Based on the Price/Forward Earnings ratio, BHP is valued a bit cheaper than 75.32% of the companies in the same industry.
- BHP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.39 | ||
| Fwd PE | 14.89 |
4.2 Price Multiples
- 92.21% of the companies in the same industry are more expensive than BHP, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, BHP is valued cheaply inside the industry as 92.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.9 | ||
| EV/EBITDA | 7.39 |
4.3 Compensation for Growth
- BHP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- BHP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.03
PEG (5Y)7.57
EPS Next 2Y5.34%
EPS Next 3Y3.79%
5. Dividend
5.1 Amount
- BHP has a Yearly Dividend Yield of 3.56%. Purely for dividend investing, there may be better candidates out there.
- BHP's Dividend Yield is rather good when compared to the industry average which is at 1.02. BHP pays more dividend than 94.81% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, BHP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.56% |
5.2 History
- The dividend of BHP decreases each year by -1.48%.
- BHP has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-1.48%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- BHP pays out 70.99% of its income as dividend. 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.
DP70.99%
EPS Next 2Y5.34%
EPS Next 3Y3.79%
BHP GROUP LTD-SPON ADR / BHP FAQ
What is the ChartMill fundamental rating of BHP GROUP LTD-SPON ADR (BHP) stock?
ChartMill assigns a fundamental rating of 5 / 10 to BHP.
Can you provide the valuation status for BHP GROUP LTD-SPON ADR?
ChartMill assigns a valuation rating of 7 / 10 to BHP GROUP LTD-SPON ADR (BHP). This can be considered as Undervalued.
How profitable is BHP GROUP LTD-SPON ADR (BHP) stock?
BHP GROUP LTD-SPON ADR (BHP) has a profitability rating of 8 / 10.
What are the PE and PB ratios of BHP GROUP LTD-SPON ADR (BHP) stock?
The Price/Earnings (PE) ratio for BHP GROUP LTD-SPON ADR (BHP) is 17.39 and the Price/Book (PB) ratio is 3.71.
What is the earnings growth outlook for BHP GROUP LTD-SPON ADR?
The Earnings per Share (EPS) of BHP GROUP LTD-SPON ADR (BHP) is expected to grow by 16.85% in the next year.