BHP Group Limited
BHP Group Limited Fundamental Analysis
BHP Group Limited (BHP.AX) shows moderate financial fundamentals with a PE ratio of 20.41, profit margin of 18.98%, and ROE of 21.41%. The company generates $54.5B in annual revenue with weak year-over-year growth of -8.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 50.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze BHP.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakBHP.AX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentBHP.AX trades at attractive valuation levels.
Growth Score
ModerateBHP.AX shows steady but slowing expansion.
Financial Health Score
ExcellentBHP.AX maintains a strong and stable balance sheet.
Profitability Score
ExcellentBHP.AX achieves industry-leading margins.
Key Financial Metrics
Is BHP.AX Expensive or Cheap?
P/E Ratio
BHP.AX trades at 20.41 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, BHP.AX's PEG of 1.96 indicates fair valuation.
Price to Book
The market values BHP Group Limited at 4.19 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.11 times EBITDA. This is generally considered low.
How Well Does BHP.AX Make Money?
Net Profit Margin
For every $100 in sales, BHP Group Limited keeps $18.98 as profit after all expenses.
Operating Margin
Core operations generate 41.31 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $21.41 in profit for every $100 of shareholder equity.
ROA
BHP Group Limited generates $8.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
BHP Group Limited generates strong operating cash flow of $19.92B, reflecting robust business health.
Free Cash Flow
BHP Group Limited generates strong free cash flow of $10.17B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.00 in free cash annually.
FCF Yield
BHP.AX converts 4.81% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.41
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.96
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.19
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.88
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.63
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.65
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How BHP.AX Stacks Against Its Sector Peers
| Metric | BHP.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.41 | 26.70 | Better (Cheaper) |
| ROE | 21.41% | 828.00% | Weak |
| Net Margin | 18.98% | -122621.00% (disorted) | Strong |
| Debt/Equity | 0.63 | 0.42 | Weak (High Leverage) |
| Current Ratio | 1.65 | 4.90 | Neutral |
| ROA | 8.91% | -6867.00% (disorted) | Weak |
BHP.AX outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews BHP Group Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
19.31%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
13.27%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
18.92%
Industry Style: Cyclical, Commodity, Value
High Growth