BHP Group Limited
BHP Group Limited (BHP) is a diversified natural resources company producing commodities along with substantial interests in oil and gas. BHP's principal business lines are mineral exploration and production, as well as petroleum exploration, production and refining. The company's assets, operations and interests are separated into copper, iron ore, nickel, metallurgical coal and potash.
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Metals & Mining
What does BHP Group Limited (BHP) do?
Aussie blue chips don't get much bigger than this.
Founded in 1851 and headquartered in Melbourne, BHP Group Limited is a leading global resources company specialising in the exploration, development, production and sales of oil and gas in Australia, the United States, Algeria and Trinidad & Tobago. It also mines for iron ore, copper, coal and nickel in Australia; copper in Chile and the United States; iron ore in Brazil; potash in Canada; and copper and zinc in Peru.
The company is currently focused on four major projects:
Atlantis Phase 3 — Situated in the Gulf of Mexico, the project is a new subsea production system tying back to BHP’s Atlantis facility. The project has the capacity to produce up to 38,000 gross barrels of oil per day.
Spence Growth Option (SGO) — SGO is located 162 kilometres north-east of Antofagasta in northern Chile. BHP is currently ramping the project up to full capacity. A new 95 ktpd (thousand tonnes per day) concentrator has been installed to increase SGO’s copper concentrate production by approximately 185 ktpa (thousand tonnes per annum) in the first 10 years of operation and extend the mining operations by more than 50 years.
South Flank — Located in WA's Pilbara region, 156 kilometres north-west of Newman and nine kilometres south of BHP’s Mining Area C, South Flank will soon become the largest operating iron ore hub in the world. It is expected to produce 145 million tonnes of iron ore each year.
Ruby — A joint venture between BHP and The National Gas Company of Trinidad & Tobago, this project is located offshore in the Block 3(a) development area of Trinidad and Tobago. Five production wells have been tied back into existing processing facilities. The project has the capacity to produce up to 16,000 gross barrels of oil per day and 80 million gross standard cubic feet of natural gas per day.
In addition to its exploration, development, and production efforts, BHP also provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services.
BHP operates out of 90 locations around the world.
Is BHP a profitable company?
Yes, very much so.
The company’s net profits grew from A$4.78b in FY2018 to A$12.33b in FY2019. It dropped a little in FY2020 to A$11.87b only to fire back up to A$15.15b in FY2021.
Between FY2020 and FY2021, BHP’s free cash flow skyrocketed 110% from A$13.14b to A$27.65b.
Is BHP a good buy?
Some investors see BHP stock as an excellent long-term investment due to its financial strength and its ability to pay dividends nonstop for over four decades.
Other investors are wary of the stock’s cyclical nature. As the price of commodities can go up and down, so can the BHP stock price. Tensions between Australia and China, inflation and other macroeconomic pressures are also a consideration for these investors at this time.
How do I buy BHP stock?
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Does BHP stock pay dividends?
Without fail, BHP stock has paid dividends to shareholders since 1981. The company usually pays dividends twice a year, with the exception of 2019, when the company generously paid a dividend three times, and 1981, when it paid only once at the end of the year.
In 2021, BHP paid out a total of A$4.0266 per share. BHP’s February 2022 interim payment was A$2.0806.
BHP offers shareholders the option of automatically reinvesting their dividend payments via a DRP (Dividend Reinvestment Plan).
Who owns BHP stock?
Institutions hold 66.7% of all BHP stock.
Some of the institutions with the largest ownership include BlackRock (7.02%), Morgan Stanley, Investment Banking and Brokerage Investments (5.65%), Norges Bank Investment Management (4.54%), The Vanguard Group (4.43%), Goldman Sachs Group, Investment Banking and Securities Investments (3.75%), JPMorgan Chase & Co, Brokerage and Securities Investments (2.8%), Capital Research and Management Company (2.6%) and Elliott Management Corporation (1.94%).
The general public owns 33%, with the remaining 0.3% owned by individual insiders, private companies and state or government bodies.
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.