Now trading at a price of $55.79, BHP has moved -1.5% so far today.
As of April 2023, BHP shares had a 50-day average price of $60.36. 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. Based in Melbourne, Australia, the large-cap Basic Materials company has 45,295 full time employees. BHP has offered a 4.7% dividend yield over the last 12 months.
Wider Gross Margins Than the Industry Average of 32.76%:
| 2020-06-30 | 2021-06-30 | 2022-06-30 | |
|---|---|---|---|
| Revenue (MM) | $42,931 | $56,921 | $65,098 |
| Gross Margins | 68.2% | 68.0% | 77.1% |
| Operating Margins | 32.0% | 45.8% | 50.5% |
| Net Margins | 18.53% | 19.86% | 47.47% |
| Net Income (MM) | $7,956 | $11,304 | $30,900 |
| Net Interest Expense (MM) | -$996 | -$1,223 | -$1,077 |
| Depreciation & Amort. (MM) | -$6,112 | -$5,084 | -$5,683 |
| Earnings Per Share | $3.14 | $4.46 | $7.19 |
| EPS Growth | n/a | 42.04% | 61.21% |
| Diluted Shares (MM) | 2,534 | 2,534 | 2,531 |
| Free Cash Flow (MM) | $8,806 | $21,622 | $26,319 |
| Capital Expenditures (MM) | -$6,900 | -$5,612 | -$5,855 |
| Net Current Assets (MM) | -$31,066 | -$26,629 | -$17,736 |
| Current Ratio | 1.45 | 1.63 | 1.69 |
| Long Term Debt (MM) | $22,036 | $18,355 | $11,749 |
| Net Debt / EBITDA | 0.69 | 0.2 | -0.06 |
BHP has strong margins with a positive growth rate, exceptional EPS growth, and low leverage. The company also benefits from growing revenues and decreasing reinvestment in the business, wider gross margins than its peer group, and consistent free cash flow. Furthermore, BHP has a decent current ratio.
A Very Low P/E Ratio but Trades Above Its Graham Number:
BHP has a trailing twelve month P/E ratio of 8.4, compared to an average of 10.03 for the Basic Materials sector. Based on its EPS guidance of $2.04, the company has a forward P/E ratio of 29.6. The -8.3% compound average growth rate of BHP's historical and projected earnings per share yields a PEG ratio of -1.02. This indicates that its shares are overvalued.Furthermore, BHP is likely overvalued compared to the book value of its equity, since its P/B ratio of 3.32 is higher than the sector average of 2.08. The company's shares are currently trading 29.1% above their Graham number. Ultimately, BHP's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
BHP Has an Analyst Consensus of Some Upside Potential:
The 4 analysts following BHP have set target prices ranging from $62.0 to $68.0 per share, for an average of $64.13 with a buy rating. As of April 2023, the company is trading -5.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
The largest shareholder is Fisher Asset Management, LLC, whose 1% stake in the company is worth $1,035,784,715.
