4 Iron And Steel Related Stocks - BHP, BSL, RIO And FMG

  • Nov 23, 2018 AEDT
  • Team Kalkine
4 Iron And Steel Related Stocks - BHP, BSL, RIO And FMG

Over the past five years, the iron ore casting and steel manufacturing had faced mixed operating conditions. Regarding contribution, the steel industry including iron contributes around $11 billion to Australia’s GDP. Approximately 5.3 million tons of steel are produced annually in Australia. Here are four iron and steel-related stocks:

BHP BILLITON LIMITED (ASX: BHP) – For more transparency on BHP’s approach to capital allocation and investment decisions, and to provide more detail about BHP, company adopted a capital allocation processes which is a key differentiator and driver of company performance, over the long term. The company reduced its debt by approximately US $15 billion and established a target net debt range of US$10 to US$15 billion. The company has recently announced the US $9 billion of additional dividends. Off-market buy-back announced of about US $5.2 billion limited. The US $15 billion invested for organic development. The ROCE in percentage is expected to reach 20% in actual by FY 2022 and improvement in base value is also expected. The stock traded at a market price of $31.550 with a daily percentage change of -0.724% as at November 23, 2018. It has undergone a performance change of 15.14% over the past 12 months. 

BUESCOPE STEEL LIMITED (ASX: BSL) – The company confirmed its previous guidance provided in August higher than 2H FY2018 which was $745.0 million, that of 1H FY2019 underlying earnings before interest and tax will be around 10 percent, which is subject to FX, spread, and market conditions. The transformation of the company has also led to significant cash generation and allowing them to return increasing amounts of money to shareholders and returned a total of nearly $850 million. The company has a low P/E of 4.310 and EPS of 2.818 AUD with a dividend yield of 1.15%. The stock traded at a market price of $12.600 with a daily percentage change of 3.789% as at November 23, 2018. It has undergone a performance change of -12.03% over the past 12 months.

RIO TINTO LIMITED (ASX: RIO) – On August 1, 2018, the company announced interim 2018 returns to shareholders of $3.2 billion.  The company has excellent operating excellence and performance throughout the year. Its disciplined capital allocation has led to balance sheet strength, superior shareholder returns, and compelling growth. The company has a P/E of 10.550 and EPS of 7.299 AUD which compares better amongst its peers. The company also has a good dividend yield of 5.19%. Strong strategic progress was made by the company with the full exit from coal, the signing of a binding conditional agreement to exit Grasberg for $3.5 billion and the announcement of the additional $3.2 billion of share buy-backs. The stock traded at a market price of $76.780 with a daily percentage change of 0.321% as at November 23, 2018. It has undergone a performance change of -12.03% over the past 12 months.

FORTESCUE METALS GROUP LTD (ASX: FMG) – To support the development of a competitive hydrogen industry in Australia and to capitalize on the economic opportunities associated with hydrogen the company recently announced a landmark partnership with the Commonwealth Scientific and Industrial Research Organization (CSIRO). The company has 24% gearing, and the company has paid A$ 0.23 per share as total dividends which are 62% of FY 18 NPAT. The company also has a gross debt of US $4.0 billion. The company has made $US 1.2 billion capital spend. The company has a decent annual dividend yield of 5.75% and attractive P/E of 10.480 and EPS of 0.382 AUD as compared to the peer basket. The stock traded at a market price of $4.010 with a daily percentage change of 0.25% as of November 23, 2018. It has undergone a performance change of -14.71% over the past 12 months.


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