BHP GROUP LIMITED
Investment Analysis: BHP Group Limited (JSE: BHG)
Step 1: Data Gathering & Source Verification
Reporting Period Used:
- Latest Full Year Results: Financial Year Ended 30 June 2025 (FY25).
-
Note on Interims: The interim period ended 31 December 2025 just closed. Results are typically released in mid-February 2026; thus, the FY25 full-year data is the most current audited financial set available.
- SENS Announcements: Reviewed for the period Jan 2025 â Jan 2026.
- Key Events: Anglo American takeover bid withdrawal (May 2025), FY25 Results declaration (Aug 2025), Dividend declaration (Aug 2025).
Step 2: Metric Extraction
| Metric | Value | Notes |
| --- | --- | --- |
| Market Cap | ~ZAR 2.6 Trillion | Huge cap; #1 most valuable stock on the JSE by market capitalization. |
| Dividend Yield (L12M) | ~3.9% | Total FY25 dividend: 110 US cents (Interim 50c + Final 60c).
Calculation: $1.10 â R20.00 (at ~$1/R18.20). Price ~R511. Yield â 3.9%. |
| Liquidity Check | High | Avg daily traded value >R350 million.
Status: Highly Liquid. No liquidity risk. |
| P/E Ratio | 18.0x | Based on Underlying Attributable Profit. Slightly high relative to historical mining lows (typically 8x-12x) but reflects "quality premium." |
| Net Asset Value (NAV) | N/A | P/E and EV/EBITDA are superior metrics for operating miners. |
Step 3: Operational & Strategic Analysis
Business Overview BHP is the world's largest diversified miner. Its "future-facing" portfolio is heavily weighted towards Copper (electrification), Iron Ore (steel), and Potash (fertilizer/food security), with a strategic withdrawal from thermal coal. It is a low-cost producer, particularly in Western Australian Iron Ore (WAIO).
Performance Trend (FY25 vs FY24)
- Revenue: Down 8% (US51.3bn). Lower realized prices for iron ore and coal dragged the top line.
- Profitability: Underlying EBITDA down 10% to US$26.0bn. However, the EBITDA margin remains sector-leading at 53%, demonstrating exceptional cost control despite inflationary pressures.
- Production: Record Copper production (>2Mt). Iron ore volumes remain resilient.
Sector Context
- China Factor: The South African and global mining sectors are currently beholden to Chinese stimulus data. Iron ore prices have softened due to the sluggish Chinese property sector.
- The "Green" Shift: Copper prices are structurally supported by the global energy transition (EVs, data centers, grids), acting as a hedge against the weaker iron ore market.
Step 4: The Verdict
Bull Case (Buy Rationale) Copper Dominance & Quality: BHP has successfully pivoted its portfolio. With the Jansen Potash project coming online soon and record copper production, it is less reliant on Iron Ore than competitors like Fortescue. It operates the highest-margin assets in the world, ensuring cash flow even in downturns.
Bear Case (Sell Rationale) Valuation & Iron Ore Exposure: Trading at an 18x P/E is historically expensive for a miner (often cyclical peaks are sold at low P/Es, but we are mid-cycle). If China's infrastructure spending disappoints further, Iron Ore prices (still a massive chunk of BHP's earnings) could collapse, dragging the share price down to the R400 level.
Fair Value Estimate
- Range: R450.00 â R490.00
- Current Price (R511.00) implies the stock is trading at a slight premium.
Final Rating: HOLD
Analyst Note: BHP is a "Sleep Well at Night" stock. It is too expensive to aggressively buy right now given the weak iron ore outlook, but it is too high-quality to sell. Hold for the USD-based dividends and wait for a pullback below R480 to accumulate.