One-glance verdict
Undervalued
$135.45 our estimate vs market $79.13
Wall Street consensus: $78.14 (-42.3% lower than our fair-value estimate)
42% below our estimate, below the bear case
Fundamentals snapshot
BHP Group Limited
BHP · NYQ · Basic Materials · Other Industrial Metals & Mining
Current price
$79.13
52-week range
$52.18 - $98.71
Market cap
$201.11B
Balance sheet
Healthy
12.10x Strong cushion
Net debt $9.87B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 14.6% last year.
- Reward Returns 24.0% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 25.8% above its 5-year average P/E.
What this company does
BHP Group Limited
BHP is a big company that digs up and sells important natural resources like copper and iron ore, which are used to make things like electronics and steel for buildings. Most of their money comes from selling these raw materials, and this matters because the prices of these materials go up and down, directly affecting how much profit BHP makes.
How the company got here
BHP Group Limited, originally founded as the Broken Hill Proprietary Company in 1885, has a long history rooted in Australian mining. It began by operating a silver and lead mine in Broken Hill, New South Wales. Over the decades, BHP grew and diversified, notably through mergers and acquisitions, including a significant merger with Billiton in 2001 to form BHP Billiton. This merger created a dual-listed company structure with operations spanning Australia and the UK. In more recent years, BHP has streamlined its operations, divesting certain assets and focusing on core commodities. The company has also unified its corporate structure, becoming solely listed on the Australian Securities Exchange.
What it actually does
BHP is a global resources company that explores for, develops, and produces essential minerals and metals. Essentially, it's in the business of digging up raw materials from the earth that are then used to make many of the products we rely on every day. These materials are crucial for industries like construction, manufacturing, and energy, and they play a role in everything from infrastructure development to the technologies powering our modern lives. BHP's operations are global, but its primary focus is on large-scale, long-life assets in countries like Australia, Chile, and Canada.
Copper
BHP mines copper, which is a metal vital for electrification and renewable energy technologies due to its excellent conductivity and resistance to corrosion. The company extracts copper ore and then processes it into either concentrate or refined cathodes, depending on the specific mine and its capabilities. BHP's copper operations are significant, with major assets like the Escondida mine in Chile being a leading global producer. This segment is a key focus for BHP's growth strategy, with the company actively working to expand its copper exposure through acquisitions and development projects.
Iron Ore
The Iron Ore segment is a major contributor to BHP's business, providing a key ingredient for steel production, which is fundamental to infrastructure and development worldwide. BHP operates an integrated system in Western Australia that connects its mines, processing facilities, rail lines, and port infrastructure to efficiently move iron ore to customers. This segment is considered BHP's primary cash engine, highlighting its importance to the company's overall financial performance.
Coal
BHP mines and processes metallurgical coal, which is a critical component in the production of steel. Steel is an essential material for building the infrastructure that supports modern life, from buildings and bridges to vehicles. The company extracts and washes the coal, then transports it via rail and export terminals to steelmaking customers globally. This segment plays a significant role in supplying materials for global development and industrial needs.
Potash
BHP is developing a significant potash business, recognizing its importance for food security and more sustainable agriculture. Potash is a key ingredient in fertilizers, which help crops grow and increase food production for a growing global population. The company's major potash development is the Jansen project in Saskatchewan, Canada, which is intended to become a new, substantial pillar of earnings for BHP, diversifying its portfolio beyond traditional mining. First production from Jansen Stage 1 is anticipated around 2026.
What management is betting on now
BHP's core strategy revolves around owning and operating large, long-life, and cost-efficient mining assets in commodities that are expected to be in high demand for decades to come. Management is particularly focused on commodities like copper, essential for electrification and renewable energy, and potash, crucial for global food security. The company is actively investing in expanding its copper business and developing its potash operations, such as the Jansen project, to create new growth platforms. BHP aims to grow value through operational excellence, resource discovery, strategic acquisitions, and careful capital allocation, all while emphasizing sustainability and responsible resource management.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $135.45 vs current price $79.13
Wall Street consensus is the average analyst price target: $78.14 (-42.3% lower than our fair-value estimate).
Our most-likely fair value is $135.45 a share — about 71.2% above today's price of $79.13, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $9.9B. Interest coverage 12.1x.
Net debt
$9.87B
Interest coverage
12.10x
BHP Group Limited's profit covers its interest bill about 12.1 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
BHP
BASELINE
BHP Group Limited
Total debt $28.43B Interest coverage 12.10x This is the baseline the peer rows are being compared against.
Total debt $22.85B Interest coverage 8.45x -30% vs BHP Carries about 1.4x less debt cushion than BHP.
Total debt $20.48B Interest coverage 5.56x -54% vs BHP Carries about 2.2x less debt cushion than BHP.
Total debt $10.36B Interest coverage 17.62x +46% vs BHP Carries about 1.5x more debt cushion than BHP.
Total debt $8.51B Interest coverage 18.96x +57% vs BHP Carries about 1.6x more debt cushion than BHP.
Total debt $45.73B Interest coverage 1.03x -92% vs BHP Carries about 11.8x less debt cushion than BHP.
What you should know
The case for and against BHP
3 Rewards
1 Risk
Rewards
-
Revenue grew 14.6% last year.
-
Returns 24.0% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 25.8% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.50x
Forward P/E
16.55x
P/B
3.95x
P/S
3.42x
EV/EBITDA
7.23x
PEG ratio
5.95x
Profitability
How much profit each dollar creates
Gross margin
85.9%
Operating margin
43.3%
Net margin
16.7%
ROE
24.0%
ROA
13.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.50x
Current ratio
1.89x
Quick ratio
1.43x
Total debt
$28.43B
Total cash
$18.56B
Growth
How the business has been compounding
Revenue TTM
$58.76B
Revenue 5Y CAGR
3.0%
EPS TTM
3.86
EPS 5Y CAGR
-8.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$21.78B
Free CF TTM
$11.93B
FCF margin
20.3%
Dividend
Shareholder payout
Yield
5.1%
Payout ratio
68.8%
Last ex-div date
2026-09-04