Daily Stock Analysis: BHP Group

BHP Group Ltd, with the ticker (BHP), is a large-cap industrial metals and mining company operating in the materials business sector. This is carry-over from last weeks minerals reports. It is my first report on BHP Group for my Viital portfolio or any of my previous six.

BHP Group Ltd is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical products. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure.

Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico.

Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.

In addition, the company provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services.

The company was founded in 1851 and is headquartered in Melbourne, Australia.

Three key data points gauge any dividend equity or fund such as BHP Group Ltd.

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

BHP Price

BHP’s price per share was $52.99 as of yesterday's market close. One year ago its price was $76.51. Thus, BHP’s share price fell $23.63 or almost 31% in the past year.

If BHP’s stock trades in the range of $50.00 to $70.00 this next year, its recent $52.99 share price might rise by $7.01 to reach $60.00 by July 11, 2023. My $7.01 upside estimate is $2.27 under the median of one year price estimates from five analysts covering BHP.

BHP Dividends

BHP’s most recently declared semi-annual dividend of $3.00 was paid March 28, to shareholders on record as of February 24th.

Since December, 2001, BHP has paid semi-annual dividends. generally increasing annually. The recent forward looking annual dividend of $6.00 equates to an annual yield of 11.32% as of Fridays share price of $52.99.

BHP Returns

Adding the $6.00 BHP annual forward-looking dividend to my estimated one-year price upside estimate of $7.01 shows a $13.10 potential gross gain, per share, to be reduced by any costs to trade BHP shares.

At Friday's $52.99 closing price, a little over $1000 would buy 19 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.53 per share.

Subtract that maybe $0.53 brokerage cost from my estimated $13.10 gross gain estimate per share results in a net gain of $12.57 X 19 shares = $338.83. for a 33.8% net gain including an 11.32% forward looking annual dividend yield.

So it is that BHP Group Ltd shows a possible 33.8% net gain including an 11.32% forward-looking dividend yield.

Over the next year at this time our $1000 investment in BHP Group Ltd shares could generate $113.20 in cash dividends. Of course, a single share of BHP stock bought at yesterday's $52.99.10 price less than half of the dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this a good time to pick up BHP shares based on their forward looking dividends for the year 2022. The forthcoming annual dividend from $1K invested is 2.14 times more than yesterday’s single share price. Consider yourself alerted. It's a sign.

All of the estimates above are speculation based on the past history of BPL Group Ltd. Only time and money invested in this stock will determine its market value.


More By This Author:

Daily Stock Analysis: ICL Group
Daily Stock Analysis: Mativ Holdings Inc
Daily Stock Analysis: Ternium S.A.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.