The BHP Group Ltd (ASX:BHP) and Xero Ltd (ASX:XRO) Share Prices to Watch Closely

September 10, 2024 12:37 PM AEST | By Team Kalkine Media

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The BHP Group Ltd (ASX:BHP) and Xero Ltd (ASX:XRO) Share Prices to Watch Closely — Image source: shutterstock

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The BHP Group Ltd share price has experienced a significant drop of 23.3% since the beginning of 2024. Meanwhile, Xero Ltd is just 2.4% shy of its 52-week high. Understanding these movements can offer valuable insights for those considering these shares.

BHP Group Ltd (ASX:BHP)

BHP Group Ltd, a prominent player in the natural resources sector, has a diversified portfolio that includes copper, iron ore, coal, and, increasingly, fertilisers. Founded in 1885, the company’s core operations are centered around mineral exploration and production. BHP is well-known for its substantial dividend payouts, making it a staple in many ASX portfolios and investment funds.

For investors interested in blue-chip stocks, BHP is often a key consideration. Blue-chip companies are typically well-established with a track record of financial stability. BHP's return on invested capital (ROIC) for FY23 was 30.30%, indicating a robust ability to generate profits from its investments. While its revenue has experienced a slight decline, compounding at -0.7% over recent years, the company's strong ROIC suggests a solid foundation.

Currently, BHP shares offer a dividend yield of approximately 5.64%, slightly above their five-year average of 5.36%. This higher yield indicates that BHP shares are trading at a level where the return to shareholders is relatively attractive compared to historical figures.

Xero Ltd (ASX:XRO)

Xero Ltd, founded in 2006 in Wellington, New Zealand, provides cloud-based accounting software designed to streamline financial management for small businesses. The company’s platform is popular among accountants and bookkeepers, offering real-time financial data accessible from any device.

Xero has a significant presence in New Zealand, Australia, the UK, and the USA. With over 3,000 employees and millions of subscribers globally, Xero has established itself as a leading provider in the accounting software market.

The recent performance of Xero shares reflects positive market sentiment, with the stock approaching its 52-week high. This performance is a testament to the company's continued growth and its ability to maintain relevance in the competitive software industry.

Both BHP Group Ltd and Xero Ltd present intriguing cases for investors. BHP’s dividend yield and strong ROIC highlight its ongoing value despite recent price declines. Meanwhile, Xero’s near-record share price suggests strong market confidence in its future performance. Keeping an eye on these companies could provide valuable insights into market trends and investment opportunities.

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