Mining giant BHP Billiton is continuing to rebound after a remarkable turnaround. In early 2020 its sales and profits shrank for two quarters amid the pandemic. But in the back half of the year it reported robust growth. On Tuesday, BHP Billiton (BBL) got an upgrade for its IBD SmartSelect Composite Rating from 94 to a near-best 96.
The revised score means the stock currently tops 96% of all other stocks in terms of key performance metrics and technical strength. Winning stocks often have a 95 or higher score in the early stages of a new price run, so that’s a good starting point when looking for the best stocks to buy and watch.
BHP Billiton Mining Operations Varied
BHP’s global operations include mining of copper, iron ore, nickel, petroleum, coal and manganese, among others.
Shares of the Australia-based company also sport an 87 EPS Rating, which means its recent quarterly and annual earnings growth is outpacing 87% of all stocks.
Its Accumulation/Distribution Rating of B- shows moderate buying by institutional investors over the last 13 weeks.
For the quarter ended Dec. 31, BHP reported a 16% increase in earnings per share, to $1.19. That came on the heels of a 16% rise in EPS the prior quarter. Revenue grew 15% for the December quarter to $12.8 billion, the same growth rate as the prior quarter.
Robust Cash Flow
CEO Mike Henry said in the earnings release, “Our operations generated robust cash flows, return on capital employed increased to 24% and our balance sheet remains strong with net debt at the bottom of our target range.”
Henry added that “The Board has announced a record half year dividend of $1.01 per share, bringing BHP’s shareholder returns to more than $30 billion over the past three years.
BHP Billiton is in a buy zone after forming a cup-with-handle pattern. Its stock traded at 64.06 Tuesday afternoon, down about 1% for the day.
BHP Billiton holds the No. 8 rank among its peers in the Mining-Metal Ores industry group. Southern Copper (SCCO), Teck Resources (TECK) and Vale (VALE) are among the top 5 highly rated stocks within the group.
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