BHP share price in focus
BHP Group, formerly known as BHP Billiton, is a diversified natural resources company founded in 1885. It produces a wide range of commodities used in energy production and manufacturing, and is expanding into fertilisers.
BHP’s primary business revolves around mineral exploration and production, with its assets and operations divided into three key focus areas: copper and related minerals (such as gold, uranium, silver, and zinc), iron ore, and coal (both metallurgical and energy).
BHP is widely regarded as a stable, dividend-paying investment and is a common component of ASX share portfolios. If you invest in a popular ETF, LIC, or through an Industry Super fund, chances are you already have some exposure to BHP shares.
QBE shares
QBE began as a marine insurance company in Townsville in the late 1800s and has grown into one of Australia’s largest insurers.
Today, the group operates in 27 countries, offering a broad range of insurance products across the commercial, consumer, reinsurance, and agriculture sectors.
Although QBE has Australian origins, only about 30% of its revenue is now generated domestically, with another 30% coming from the United States and the remainder primarily from Europe.
BHP & QBE share price valuation
We would consider BHP to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, BHP Group Ltd reported a debt/equity ratio of 45.3%, meaning the company has more equity than debt.
Over the last 5 years, BHP has delivered an average dividend yield of 6.9% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, BHP reported an ROE of 19.7%. For a mature business you generally want to see an ROE of more than 10%, so BHP clears this hurdle.
As for QBE Insurance Group Ltd, they reported a debt/equity ratio of 27.0% in CY24, meaning the company has more equity than debt.
Since 2019 QBE has achieved an average dividend yield of 2.8% per year, and in CY24 reported an ROE of 17.2%
Keep in mind that these are only a small selection of metrics. We don’t have enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
