stop buy back and increase dividend payout , page-11

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.