Fact based stock research
BHP (ASX:BHP)

AU000000BHP4

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

BHP stock research in summary

bhp.com

ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), BHP (Diversified Metals & Mining, Australia) shares have lower financial characteristics compared with similar stocks. Shares of BHP are low in value (priced high) with a consolidated Value Rank of 29 (worse than 71% of alternatives), show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 29), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on BHP's financial characteristics. As the company BHP's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 29), low growth (Obermatt Growth Rank of 21), and risky financing practices (Obermatt Safety Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	29
Growth Rank	21
Safety Rank	29
Combined Rank	17

Country	Australia
Industry	Diversified Metals & Mining
Index	ASX 100, ASX 200, ASX 300, ASX 50, FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Copper, Electromobility, Human Rights, Iron, Zinc, Silver, Uranium, Water Efficiency
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: BHP

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	67	47	29	29
GROWTH
GROWTH	67	35	45	21
SAFETY
SAFETY	25	94	34	29
SENTIMENT
SENTIMENT	n/a	74	76	^new
360° VIEW
360° VIEW	n/a	81	37	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better BHP is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	67	47	29	29
GROWTH
GROWTH	67	35	45	21
SAFETY
SAFETY	25	94	34	29
COMBINED
COMBINED	61	65	22	17

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of BHP the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), BHP shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for BHP. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 81% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than 84% of comparable companies, indicating a low value concerning BHP's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 37 which means that the stock price compared with what market professionals expect for future profit levels is higher than 63% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7 is also low. Compared with invested capital, the stock price is higher than for 93% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a hold recommendation based on BHP's stock price compared with the company's operational size and dividend yields. Should dividend investors pick BHP? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose BHP only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	57	28	14	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	59	49	37	37
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	34	16	5	7
DIVIDEND YIELD
DIVIDEND YIELD	98	91	89	81
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	67	47	29	29

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of BHP; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), BHP shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for BHP. Only Capital Growth has a good rank of 64, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 22 which means that currently professionals expect the company to grow less than 78% of its competitors. Profit Growth with a rank of 27 and Stock Returns with a rank of 31 are also low (below 69% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for BHP is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	58	13	12	22
PROFIT GROWTH
PROFIT GROWTH	88	30	52	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	81	58	64
STOCK RETURNS
STOCK RETURNS	48	41	63	31
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	67	35	45	21

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of BHP.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company BHP has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of BHP is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for BHP. Liquidity is at 73, meaning the company generates more profit to service its debt than 73% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 27, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 73% of its competitors. Leverage is also high at a rank of 34, which means that the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), BHP has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	30	38	38	34
REFINANCING
REFINANCING	18	99	13	27
LIQUIDITY
LIQUIDITY	81	85	73	73
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	25	94	34	29

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of BHP and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	48	22	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	82	94	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	22	90	^new
MARKET PULSE
MARKET PULSE	n/a	83	46	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	74	76	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for BHP.
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