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 cheap, but on the other hand it scores bad on growth. 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.
In the past year BHP had a positive cash flow from operations.
Each year in the past 5 years BHP has 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.
The Return On Invested Capital of BHP (15.56%) is better than 94.81% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BHP is significantly above the industry average of 11.67%.
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
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.
BHP's Operating Margin of 40.51% is amongst the best of the industry. BHP outperforms 92.86% of its industry peers.
BHP's Operating Margin has improved in the last couple of years.
BHP has a Gross Margin of 61.55%. This is amongst the best in the industry. BHP outperforms 93.51% of its industry peers.
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
An Altman-Z score of 3.30 indicates that BHP is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.30, BHP is in the better half of the industry, outperforming 60.39% 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.
The Debt to FCF ratio of BHP (1.95) is better than 81.82% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that BHP is not too dependend on debt financing.
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 | 3.3 |
ROIC/WACC1.64
WACC9.5%
2.3 Liquidity
A Current Ratio of 1.70 indicates that BHP should not have too much problems paying its short term obligations.
The Current ratio of BHP (1.70) is worse than 65.58% 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.
The Quick ratio of BHP (1.25) is comparable to the rest of the 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%.
BHP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.10% yearly.
The Revenue has decreased by -3.13% in the past year.
BHP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.68% yearly.
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.
The Revenue is expected to decrease by -0.48% on average over the next years.
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
Based on the Price/Earnings ratio of 10.50, the valuation of BHP can be described as reasonable.
Based on the Price/Earnings ratio, BHP is valued cheaper than 94.81% of the companies in the same industry.
BHP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.45.
The Price/Forward Earnings ratio is 12.23, which indicates a correct valuation of BHP.
Based on the Price/Forward Earnings ratio, BHP is valued a bit cheaper than the industry average as 69.48% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of BHP to the average of the S&P500 Index (21.90), we can say BHP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.5 | ||
| Fwd PE | 12.23 |
4.2 Price Multiples
90.26% 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 89.61% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.37 | ||
| EV/EBITDA | 5.1 |
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)1.3
EPS Next 2Y-12.45%
EPS Next 3Y-8.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.84%, BHP is a good candidate for dividend investing.
BHP's Dividend Yield is rather good when compared to the industry average which is at 2.98. BHP pays more dividend than 93.51% of the companies in the same industry.
BHP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.84% |
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%
50.52
-0.21 (-0.41%)
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 Cap128.19B
Analysts72.73
Price Target57.15 (13.12%)
Short Float %0.62%
Short Ratio5.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.84% |
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 | 10.5 | ||
| Fwd PE | 12.23 | ||
| P/S | 2.39 | ||
| P/FCF | 12.37 | ||
| P/OCF | 6.38 | ||
| P/B | 2.82 | ||
| P/tB | 2.93 | ||
| EV/EBITDA | 5.1 |
EPS(TTM)4.81
EY9.52%
EPS(NY)4.13
Fwd EY8.18%
FCF(TTM)4.08
FCFY8.09%
OCF(TTM)7.92
OCFY15.68%
SpS21.13
BVpS17.94
TBVpS17.24
PEG (NY)N/A
PEG (5Y)1.3
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 | 3.3 |
F-Score7
WACC9.5%
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%