Is Mammoth Miner BHP Billiton A Buy Or Hold-Off?

Today I'm reviewing a large-cap industrial metal and minerals outfit. Its name is BHP Billiton plc. Its trading ticker symbol is BBL

BHP Billiton PLC is a producer of major commodities. The company's operations involve exploration, development and production of oil and gas, mining of copper, iron ore, and metallurgical coal and thermal (energy) coal.

It also engages in the mining, smelting, and refining of nickel; the provision of freight, finance, and administrative services, as well as trading, marketing, and support services; and potash development activities. 

The company was formerly known as Billiton Plc. The company was incorporated in 1996 and is based in London, the United Kingdom. 

BHP Billiton Plc is a subsidiary of BHP Billiton Group.

I use three key data points to gauge the value of any dividend equity or fund like BHP Billiton plc. (BBL): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

BBL Price

BHP's price per share was $42.62 at yesterday's market close. A year ago its price was $33.89 for a gain of $8.73 per share.  

Assuming BHP's price will trade in the range of $33 to $53 next year, its price could grow by that same $8.73 again from its current $42.62 to $51.35 by late July, 2019. 

BBL Dividends

BHP's most recent variable semi-annual dividend was $1.10 paid March 27th. 

Based on this semi-annual amount, the annual take of $2.20 yields 5.16% at yesterday's $42.62 share price. 

Gains For BBL?

Adding the $2.20 potential annual dividend to the $8.73 potential year over year price gain makes a $10.93 projected gross annual per share gain, which will be reduced by costs to trade the shares.  

A little under $1,000.00 invested today at the $42.62 recent price buys 23 shares. 

A $10 broker fee paid half at purchase and half at sale costs about $0.43 per share, subtracting that $0.43 brokerage cost from the estimated $10.93 gross gain leaves a net gain of $10.50 X 23 shares = $241.50 or a 24.2% net gain on a $980.26 investment.

Therefore,  BHP Billiton plc.  (whose ticker symbol is BBL) , now shows a possible 24.2% net gain including a 5.16% dividend yield. 

Four analysts cover this stock:

Three say "hold" BBL.

One says BBL will "underperform". 

Their four-analyst consensus recommendation adds up to  3.3 or "hold" and their median price target just $1 above the current price. 

Y Charts has not yet rated BBL for an overall "Y" rating; it has "insufficient data" for a Value score and insufficient data" for a Fundamental mark and "insufficient data" for a  Historic Valuation score.

You could look at all those numbers this way, BHP Billiton plc. (BBL) has made money, is making money, and could net a 24.2% net gain including a 5.16% annual dividend yield. It could be more, it could be far less.

The above speculation is based on past year performance. Actual results remain to be seen. Results could turn out to be far higher or lower. More study is required for you to determine if BHP Billiton plc. (BBL) is worth your time and money.

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 solicitation, ...

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