Consensus estimates have EPS of 180.7c (2015), 57.1c (2016), 67.4c (2017) 104.7c (2018).
Against that, divvies of 161.5c(2015), 175.5c(2016), 174.6c (2017), 113.6c (2018)
BHP will need to borrow to pay their divvy, adding to their worryingly high debt (debt:equity of 48%).
Now I know consensus doesn't mean reality, but these numbers are by analysts that crunch the numbers far more intensely than most in here.
There is little doubt that BHP will survive, and survive well: they have a huge cash flow (nearly $45B last FY), but perceived risks will weigh on their SP.
The point, however is: why invest in a company that's not going anywhere for the foreseeable future? Just to get a $2 divvy? Surely the risk is too high with volatility in the SP easily neutralising the divvy? The SP may never fall to $14, but there is a pretty even chance that it will. In my view, it will test somewhere in the area of $16 to $18 in the near term. For LT holders, these blips may not be pertinent. For ppl looking to get in now I would advise caution.
BHP Price at posting:
$20.28 Sentiment: Sell Disclosure: Not Held
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