Now trading at a price of $48.36, BHP has moved -1.1% so far today.
BHP returned losses of -16.2% last year, with its stock price reaching a high of $63.21 and a low of $47.3. Over the same period, the stock underperformed the S&P 500 index by -22.6%. AThe company's 50-day average price was $49.96. 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 Energy company has 38,962 full time employees. BHP has offered a 2.5% dividend yield over the last 12 months.
Generally Positive Cash Flows and a Decent Current Ratio:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $44,288 | $38,924 | $30,527 | $25,713 | $53,817 | $55,658 |
| Operating Margins | 19% | 35% | 49% | 42% | 43% | 32% |
| Net Margins | 12% | 22% | 34% | 28% | 27% | 17% |
| Net Income (M) | $5,190 | $8,736 | $10,506 | $7,126 | $14,324 | $9,601 |
| Net Interest Expense (M) | -$524 | -$858 | -$352 | -$652 | -$1,531 | -$1,489 |
| Depreciation & Amort. (M) | $3,014 | $4,667 | $2,851 | $2,456 | $5,061 | $5,295 |
| Diluted Shares (M) | 5,058 | 2,946 | 2,950 | 5,066 | 5,066 | 5,072 |
| Earnings Per Share | $0.96 | $1.57 | $1.86 | $1.27 | $2.55 | $1.56 |
| EPS Growth | n/a | 63.54% | 18.47% | -31.72% | 100.79% | -38.82% |
| Free Cash Flow (M) | $7,442 | $15,706 | $13,277 | $6,770 | $18,701 | $20,665 |
| Current Ratio | 1.62 | 1.45 | 1.63 | 1.69 | 1.23 | 1.7 |
BHP has strong operating margins with a stable trend and generally positive cash flows. Additionally, the company's financial statements display positive EPS growth and a decent current ratio of 1.7.
a Very Low P/E Ratio but Trading Above Its Fair Price:
BHP has a trailing twelve month P/E ratio of 11.2, compared to an average of 13.62 for the Energy sector. Based on its EPS guidance of $4.42, the company has a forward P/E ratio of 11.3. According to the 24.4% compound average growth rate of BHP's historical and projected earnings per share, the company's PEG ratio is 0.46. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 15.1%. On this basis, the company's PEG ratio is 0.74. This suggests that its shares are undervalued. In contrast, BHP is likely overvalued compared to the book value of its equity, since its P/B ratio of 5.39 is higher than the sector average of 1.86. The company's shares are currently trading 162.3% below 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.
Analysts Give BHP an Average Rating of Buy:
The 5 analysts following BHP have set target prices ranging from $49.0 to $61.0 per share, for an average of $53.1 with a buy rating. The company is trading -8.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
BHP has a very low short interest because 0.4% of the company's shares are sold short. Institutions own 3.6% of the company's shares, and the insider ownership rate stands at 0.01%, suggesting a small amount of insider investors. The largest shareholder is Fisher Asset Management, LLC, whose 1% stake in the company is worth $1,074,807,493.
