2 Mining Stocks - S32, BHP

  • Oct 31, 2018 AEDT
  • Team Kalkine
2 Mining Stocks - S32, BHP

As the mining sector has been outperforming the market since a couple of years now, the investors are seeking satisfactory earnings, and with companies having strong balance sheet there are still buying opportunities with some of the mining sector stocks like the ones mentioned here:

South32 Limited (ASX: S32) – The company says climate issues are affecting investment decisions as public concern over climate change has made it critical to be open and transparent about related risks and opportunities. The company coupled detailed climate risk disclosures with actions to reduce exposure which is in line with the recommendations from the G20’s Task Force on Climate related Financial Disclosures. However, the completion of acquisition of Eagle Down metallurgical coal project in Queensland in September and the acquisition of Arizona Mining, owner of the silver, lead, zinc Hermosa project in Arizona has been supported by the group’s cashflow position. With 16% rise in the underlying earnings of 1.3 billion dollars, the company posted the revenue of 7.5 billion dollars posted. There was 8% rise in statutory profit of 1.3 billion dollars, the return on invested capital was recorded at 13.5% and 53% of total shareholder returns. During the September 2018 quarter, net cash balance decreased to US $679 m by 50% from US $1362m. The stock is trading up by 0.277% at $3.620 as at October 31, 2018. However, the stock has witnessed a performance change of 6.47% over the past 12 months. 

BHP Billiton Limited (ASX: BHP) – The company earlier reported that its underlying profit increased by 33% up to US$8.9 billion with dividend of US 63 cents per share being recorded and free cash flow of US $12.5 billion. Driven by Underlying profit increasing by 33 percent to US$8.9 billion. The market cap of BHP was recorded at $98.92bn, with price to earnings ratio (P/E) of 34.210x as on October 31, 2018 and earnings per share (EPS) of 0.942 AUD represent a comparatively higher ratio. Recorded dividend of US 63 cents per share is another reason to look at the stock with an annual dividend yield of 4.94%. In total the company returned US$6.3 billion to shareholders. The company is focused on high quality, low cost assets that generate strong cash flows through the cycle, and the capex is below US$8 billion for FY2019 and FY2020. The stock is trading at $32.210 as at October 31, 2018. However, the stock has witnessed a performance change of 20.99% over the past 12 months.


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