I have never held BHP but have it on my buy list but I require a slightly bigger discount to the current SP.
I have a DCF valuation of 236 billion based on the following;
Starting FCF 12.225 billion (average of the last 3 years)
Growth rate years 1-5 9%
Growth rate years 6-9 decreasing to 3%(inflation rate)
WACC 9.8%
Even though 20 billion in buy backs sounds like a significant figure its around 10% of current EV. The decrease in SP is caused around sentiment in relation to China, and concerns (at least short term) around the US shale strategy and a potential write down in asset value.
If the buybacks hadn't occured the SP in theory could be 10-12% lower.
Also I can understand managements reasoning for a progressive dividend policy and not wanting to pay a higher dividend ST and then find its unsustainable in the lower end of the commodity cycle.
As an individual investing in BHP is a long term strategy which is essentially the same as what management are doing in executing buybacks particularly in lieu of viable acquisitions. At PER around 10 buying BHP stock is a good long term option for the company.
Not saying you are wrong in principle just offering an alternative view.
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Last
$37.20 |
Change
0.630(1.72%) |
Mkt cap ! $188.8B |
Open | High | Low | Value | Volume |
$37.00 | $37.35 | $36.76 | $336.4M | 9.055M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 520 | $37.19 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$37.25 | 20 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 260 | 37.190 |
3 | 5427 | 37.180 |
2 | 567 | 37.150 |
2 | 2000 | 37.140 |
1 | 35896 | 37.130 |
Price($) | Vol. | No. |
---|---|---|
37.250 | 20 | 1 |
37.260 | 27400 | 3 |
37.270 | 1150 | 2 |
37.290 | 600 | 1 |
37.300 | 6360 | 5 |
Last trade - 16.10pm 02/07/2025 (20 minute delay) ? |
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