What Are the Fundamentals Of BHP?

Now trading at a price of $66.0, BHP has moved 0.6% so far today on a volume of 1,057,191, compared to its average of 3,339,370. In contrast, the S&P 500 index moved -0.0%.

BHP shares moved 14.1% over the last 52 weeks, with a high of $71.06 and a low of $46.92. During this time, the stock outperformed the S&P 500 index by 31.5%. As of January 2022, the company's 50-day average price is $59.0. BHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. The large-cap Basic Materials company has 45,295 full time employees and is based in Melbourne, Australia. BHP has returned a 5.0% dividend yield over the last 12 months.

Snapshot of the Company's Strong operating Margins with a Positive Growth Rate:

2019-06-30 2020-06-30 2021-06-30 2022-06-30
Revenue (MM) $44,288 $42,931 $60,817 $65,098
Revenue Growth n/a -3.06% 41.66% 7.04%
Gross Margins 69.6% 68.2% 75.9% 77.1%
Gross Margins Growth n/a -2.01% 11.29% 1.58%
Operating Margins 37.0% 33.7% 48.4% 50.5%
Operating Margins Growth n/a -8.92% 43.62% 4.34%
Earnings Per Share $3.2 $3.14 $4.46 $7.9
EPS Growth n/a -1.88% 42.04% 77.13%
Free Cash Flow (MM) $11,621 $8,806 $20,628 $26,319
FCF Growth n/a -24.22% 134.25% 27.59%
Capital Expenditures (MM) -$6,250 -$6,900 -$6,606 -$5,855
Net Debt / EBITDA 0.38 0.53 0.08 -0.07

BHP Is Reasonably Valued:

Compared to the Basic Materials sector's average of 8.57, BHP has a trailing twelve month price to earnings (P/E) ratio of 8.4 and, based on its EPS guidance of 2.04, an expected P/E ratio of 32.4.

BHP's price to book (P/B) ratio is 3.7 compared to its sector average of 1.86. The company is likely overvalued in terms of its net tangible assets. The company's shares are currently trading 52.6% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 4.68 * 17.766) = $43.25

Most of the Market Indicators on BHP Are Negative:

4 analysts are following BHP and have set target prices ranging from $64 to $77 per share. On average, they have given the company a rating of buy. At the current price of $66.0, BHP is trading -4.36% away from its average analyst target price of $69 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.