Are These 2 Iron Ore Stocks Having Great Potential – BHP And FMG

Are These 2 Iron Ore Stocks Having Great Potential - BHP And FMG

BHP Group Limited

The Melbourne-based BHP Group (ASX: BHP) is engaged in the exploration, acquisition, development, and commercialization of natural resources such as oil and gas; mining of copper, silver, lead, zinc, molybdenum, gold, iron, uranium along with metallurgical and energy coal worldwide.  Besides, it also provides other services like smelting, refining of nickel, freight, finance, amongst many other allied services.

BHP Group has a massive market capitalization of AUD111.77 billion along with approximately 2.95 billion volume of shares outstanding. With the close of the market trading on February 21st, 2019, the last sell-off price for the BHP stock stood at AUD 37.850, down 0.237%, indicating an intra-day loss of AUD 0.090. The stock price of late is quite close to the 52-week high of AUD 38.200. Around 9.32 billion volume of shares were traded in total.

In hindsight, the price movement analysis reflects a reasonably good stock performance over the last couple of months with a sustained positive return yield. The three-month return stood at 21.05%, the six-month return was at 19.29%, and a YTD return so far at 17.49. The stock price exhibits an uptrend since the onset of the new year.

Also, as per the company’s recently released Half-yearly results for the period ended December 31st, 2018 (1H FY2019), the attributable profit was posted at USD 3.8 billion, and the underlying attributable profit was at USD 3.7 billion, down 8% on the prior period.  Moreover, the underlying EBITDA was posted at USD 10.5 billion at a margin of 52% from continuing operations. The company also reported a maximized net operating cash flow of USD 6.7 billion and free cash flow of USD 3.6 billion from continuing operations. The net debt was reduced by USD 1.0 billion to USD 9.9 billion relative to the preceding half year.

Fortescue Metals Group Ltd

The East Perth, Australia-based Fortescue Metals Group Limited (ASX: FMG) is another company from the metals and mining industry and explores, develops, processes and commercializes iron ore across various countries including China, Australia, and others.

Fortescue Metals is also a large-cap on the ASX with AUD 20.6 billion of market capitalization and approximately 3.08 billion outstanding shares. At the close of the market trading on February 21st, 2019, the FMG stock’s last sell-off price stood at AUD 6.410, down 4.185%, indicating an intra-day fall of AUD 0.280. However, the trending stock price is quite close to the 52-week high of AUD 6.830. Around 25.51 million volume of shares were traded in total.

Besides, the past price movement depicts a good performance over the past year. The stock has generated a three-month return yield of 63.97%, the six-month return yield of 57.04% as well as an impressive YTD return of 61.20%.

The company recently released its Half-yearly results for the period ended December 31st, 2018 (1H FY2019), posting the net profit after tax at USD 644 million and underlying EBITDA at USD 1.6 billion. Besides, the company net debt stood at USD 3.0 billion, including USD 962 million cash in hand at the end of the period. Fully franked dividends paid out to the shareholders amounted to a total of AUD 0.30 per share.

Market analysts are keeping a close eye on these large-cap mining stocks.


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