Analyzing BHP Billiton (NYSE:BHP) and Its Rivals

BHP Billiton (NYSE: BHP) is one of 86 publicly-traded companies in the “Integrated Mining” industry, but how does it compare to its competitors? We will compare BHP Billiton to similar businesses based on the strength of its dividends, profitability, analyst recommendations, risk, institutional ownership, valuation and earnings.

Dividends

BHP Billiton pays an annual dividend of $1.72 per share and has a dividend yield of 3.5%. BHP Billiton pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Integrated Mining” companies pay a dividend yield of 3.4% and pay out 57.6% of their earnings in the form of a dividend.

Profitability

This table compares BHP Billiton and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BHP Billiton N/A N/A N/A
BHP Billiton Competitors -7,771.86% 4.16% 0.62%

Risk & Volatility

BHP Billiton has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, BHP Billiton’s competitors have a beta of 0.41, suggesting that their average share price is 59% less volatile than the S&P 500.

Insider and Institutional Ownership

3.3% of BHP Billiton shares are held by institutional investors. Comparatively, 28.6% of shares of all “Integrated Mining” companies are held by institutional investors. 0.0% of BHP Billiton shares are held by insiders. Comparatively, 13.0% of shares of all “Integrated Mining” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares BHP Billiton and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
BHP Billiton $38.29 billion $5.89 billion 22.48
BHP Billiton Competitors $11.16 billion $994.85 million -24.80

BHP Billiton has higher revenue and earnings than its competitors. BHP Billiton is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and target prices for BHP Billiton and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BHP Billiton 5 5 5 0 2.00
BHP Billiton Competitors 880 2934 3086 84 2.34

BHP Billiton presently has a consensus target price of $38.18, suggesting a potential downside of 23.13%. As a group, “Integrated Mining” companies have a potential downside of 4.71%. Given BHP Billiton’s competitors stronger consensus rating and higher probable upside, analysts plainly believe BHP Billiton has less favorable growth aspects than its competitors.

Summary

BHP Billiton competitors beat BHP Billiton on 9 of the 15 factors compared.

About BHP Billiton

BHP Billiton Limited is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. The Company extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. The Company manages product distribution through its global logistics chain, including freight and pipeline transportation. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing.

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