Seeking Alpha
Profile| Send Message|
( followers)  

BHP Billiton (NYSE:BHP) is the world's largest diversified natural resources company and the management objective is to create long term shareholder value through acquisitions, organic growth, development and marketing of natural resources. This seems to be coming to pass for its strategic purchases, and extensive organic growth programs should continue to boost growth possibly even under subdued market conditions. A large increase in higher-grade copper production in Escondida, strong production from Queensland coal and drilling at non operated Gulf of Mexico's facilities should continue to deliver high-margin production.

Reasons to be bullish on BHP Billiton Ltd (BHP):

  • A five-year sales growth rate of 14.42%
  • Sales Vs 1 year ago up 35%
  • A good long-term debt to equity ratio of 0.29
  • Year over year projected growth rate foe 2013 of 19.2%
  • Operating margin 33%
  • Profit margin 30%
  • 3-5 year EPS projected growth rate of 11.9%
  • Quarterly revenue growth rate of 9.9%
  • A very strong levered free cash flow of $14.2 billion
  • Net income increased from $5.8 billion in 2009 to $23.9 billion in 2011
  • EBITA increased from $15.4 billion in 2009 to $36.7 billion in 2011
  • Cash flow per share surged from $6.08 in 2009 to $16.64 in 2011\
  • Annual EPS before NRI more than tripled from $2.24 in 2007 to $7.83 in 2011
  • Sales increased from $50 billion in 2009 to $71.7 billion in 2011
  • A decent yield of 3.6%
  • Five year cash flow per share average of 7.81
  • A strong five year dividend growth rate of 19.6%
  • A low payout ratio of 21%
  • $100K invested for 10 years would have grown to 613K

Company: BHP Billiton Ltd

Growth

  1. Net Income ($mil) 12/2011 = 23946
  2. Net Income ($mil) 12/2010 = 13009
  3. Net Income ($mil) 12/2009 = 5877
  1. EBITDA ($mil) 12/2011 = 36784
  2. EBITDA ($mil) 12/2010 = 24331
  3. EBITDA ($mil) 12/2009 = 15488
  1. Cash Flow ($/share) 12/2011 = 16.64
  2. Cash Flow ($/share) 12/2010 = 10.26
  3. Cash Flow ($/share) 12/2009 = 6.08
  1. Sales ($mil) 12/2011 = 71739
  2. Sales ($mil) 12/2010 = 52798
  3. Sales ($mil) 12/2009 = 50211
  1. Annual EPS before NRI 12/2007 = 2.24
  2. Annual EPS before NRI 12/2008 = 5.5
  3. Annual EPS before NRI 12/2009 = 2.1
  4. Annual EPS before NRI 12/2010 = 4.48
  5. Annual EPS before NRI 12/2011 = 7.83

Dividend history

  1. Dividend Yield = 3.6
  2. Dividend Yield 5 Year Average 12/2011 = 2.25
  3. Dividend 5 year Growth 12/2011 = 19.65

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -30.97
  2. Next 3-5 Year Estimate EPS Growth rate = 11.92
  3. Debt/Total Cap 5 Year Average 12/2011 = 14.12
  4. Current Ratio 06/2011 = 0.85
  5. Current Ratio 5 Year Average = 1.53
  6. Quick Ratio = 0.97
  7. Cash Ratio = 0.55
  8. Interest Coverage Quarterly = N/A

For investors looking for other ideas data has been provided on one additional company. Investors might also find some investment ideas here: Alcatel-Lucent: A Chance To Earn 7% Plus A Lower Entry price with this strategy.

Company: Peabody Energy (NYSE:BTU)

Levered free cash flow= $142 million

Basic overview

  1. Percentage Held by Insiders = 0.33
  2. Relative Strength 52 weeks = 16
  3. Dividend 5-year Growth = 10.01
  4. Cash Flow 5-year Average = 4.11
  5. Dividend Yield 5-Year Average = 0.65
  6. Quarterly revenue growth 17%
  7. Profit margins = 11.54%
  8. Beta= 1.92
  9. Percentage held by institutions= 75%
  10. Short percentage of float= 2.9%
  11. Five year sales growth rate= 9.75

Growth

  1. Net Income ($mil) 12/2011 = 958
  2. Net Income ($mil) 12/2010 = 774
  3. Net Income ($mil) 12/2009 = 448
  4. Net Income Reported Quarterly ($mil) = 173
  1. EBITDA ($mil) 12/2011 = 2095
  2. EBITDA ($mil) 12/2010 = 1801
  3. EBITDA ($mil) 12/2009 = 1231
  4. Cash Flow ($/share) 12/2011 = 5.97
  5. Cash Flow ($/share) 12/2010 = 4.68
  6. Cash Flow ($/share) 12/2009 = 3.43
  1. Sales ($mil) 12/2011 = 7974
  2. Sales ($mil) 12/2010 = 6860
  3. Sales ($mil) 12/2009 = 6012
  1. Annual EPS before NRI 12/2007 = 1.56
  2. Annual EPS before NRI 12/2008 = 3.63
  3. Annual EPS before NRI 12/2009 = 1.92
  4. Annual EPS before NRI 12/2010 = 3.05
  5. Annual EPS before NRI 12/2011 = 4.17

Dividend history

  1. Dividend Yield = 1.4
  2. Dividend Yield 5 Year Average 12/2011 = 0.65
  3. Dividend 5 year Growth 12/2011 = 10.01

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.09
  2. Payout Ratio 5 Year Average 06/2011 = 0.11
  3. Change in Payout Ratio = -0.02

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 10.27
  2. 5 Year History EPS Growth 12/2011 = 16.38
  3. ROE 5 Year Average 12/2011 = 21.18
  4. Return on Investment 12/2011 = 10.88
  5. Debt/Total Cap 5 Year Average 12/2011 = 45.26
  6. Current Ratio 12/2011 = 1.86
  7. Current Ratio 5 Year Average = 1.49
  8. Quick Ratio = 1.4
  9. Cash Ratio = 0.9
  10. Interest Coverage Quarterly = 3.51

Conclusion

We still believe there is more downside to this market before a multi-month bottom takes hold. Long-term investors can use strong pullbacks to slowly start deploying money into long-term investments. Investors looking for other ideas might find these articles to be of interest: McDonald's 1 Of 3 Interesting Long-Term Prospects and Total SA: A Great Entry Price Or The Potential To Earn an extra 7%.

Disclaimer

This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies - let the buyer beware.

Source: 20 Reasons To Like BHP Billiton

Additional disclosure: EPS and Price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com.