BHP Pays A HUUUGE DIVIDEND! Over 11%!!!!!: $BHP

BHP Pays A HUUUGE DIVIDEND! Over 11%!!!!!: $BHP ////

Let me show you how to sift through BHP’s income statement and statement of cash flows to understand their financials really well. We can run my discounted cash flow model together to see if the stock is a buy or a sell. We are also analyzing the financial ratios to see how they compare to their competitors. We will look at the debt of the company and equity. We will also calculate the WACC (weighted average cost of capital) so we can discount the future cash flows. Let's also look to see if the company is paying a dividend.

0:00 Opening
0:21 High Level Company Detail
4:49 Financial Review
9:48 Capital Structure
10:11 Valuation Results
11:17 More info
16:58 Financial Ratios
17:51 Competitor Analysis
18:17 Closing

- BHP produces iron ore, copper, petroleum and coal. Iron ore makes up 57% its total revenue. China purchases two thirds of the company's iron ore. It's the world's largest mining company, based on market cap

- It is the 3rd largest producer of iron ore in the world. 98% of iron ore is used to make steel. Steel is used in many things such as roads, bridges, buildings, auto parts, etc. The Evergrande Crisis will really hurt this company since China imports 75% of the worlds iron ore. Evergrande has 300 bn USD worth of debt. Which is 2% of China's GDP. It is the 2nd largest property developer in China. Property prices have been going up dramatically in China the past decade. Evergrande was able to borrow more money since its asset base kept increasing. This company has been borrowing with the assumption home prices continued rising but the problem is once house prices stop rising or even worse start to decline then over leveraged companies are unable to pay the interest on their debt. It is not just Evergrande who levered themselves to the gills. Other property developers are in the same boat as them. Evergrande is just so big so they are the company everyone is talking about. Their debt to equity ratio is 162%. Which means for each dollar of equity they have $1.62 of debt. This is similar to being upside down on your mortgage. Sung Hung Kai's mkt cap is almost 3 times Evergrande's and their debt to equity ratio is really good at 14%. China's R.E. uses 25% of the world's iron ore. As you can see this situation may be catastrophic for iron ore producers.

- BHP is the 4th largest producer of copper in the world.
- Copper supply may start to suffer as demand keeps increasing.43% of copper is used in building construction. 20% in electronics. 20% in transportation equipment. 10% in consumer products and 7% in machinery. Copper is more prevalent in Evs than regular cars. A conventional car has 18-49 pounds of copper, hybrid electric vehicles contain 85 pounds, plug-in hybrid electric vehicles use 132 pounds, battery electric vehicles contain 183 pounds, a hybrid electric bus contains 196 pounds, and a battery electric bus has 814 pounds. The greener we get as a nation the more demand there will be for copper. Also, an immense amount of copper is used in wind and solar infrastructure. A single wind farm contains between 4 million and 15 million pounds of copper. In 2018, 55,000 tons of copper were used for the wiring inside of the solar panels installed in the US. Globally, 490,000 tons of copper were used in solar panels. I used 2018 numbers because I could not find anything more recent.

- It went public in 1984 and currently trades on the NYSE, Australian Stock Exchange, Mexican Bolsa, Swiss, Deutsche Boerse, Johannesburg, Buenos Aires & LSE

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Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future.

This video is not intended to be investment advice. Seek a duly licensed professional for investment advice. I'm just a lowly mathematician!

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