MIN share price in focus
Mineral Resources Limited (MIN) is a diversified Australian mining company primarily focused on the extraction of lithium and iron ore in Western Australia.
In addition to its mining operations, MIN offers mining and engineering services to external clients through its wholly-owned subsidiary, CSI Mining Services (CSI). CSI provides capital infrastructure and operational expertise across Western Australia, Queensland, and the Northern Territory.
What sets Mineral Resources apart from its competitors is its in-house engineering and construction capabilities, which provide full control and flexibility throughout the product development process.
BHP shares
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.
MIN & BHP share price valuation
As a growth company, some of the trends we might investigate from MIN include revenue growth, profit growth, and return on equity (ROE). These measures can indicate the growth rates and prospects of the company, as well as their ability to generate returns from their assets.
Since 2021, MIN has grown revenue at a rate of 12.2% per year to reach $5,278m in FY24. Over the same stretch of time, net profit has fallen from $1,270m to $125m. As for ROE, MIN last reported a ROE of 3.2%.
Since BHP is more of a ‘mature’ or ‘blue-chip’ business, some of the metrics that could be considered important include the debt/equity ratio, average yield, and return on equity, or ROE. These are useful as they give us an idea of debt levels and the company’s ability to generate a return on assets and pay out profits (which is what we want from a blue chip). In FY24, BHP Group Ltd reported a debt/equity ratio of 45.3%, meaning the company has more equity than debt.
As for dividends, since 2020 BHP has paid an average dividend yield of 6.9% per year.
Finally, in FY24, BHP reported an ROE of 19.7%. For a mature business you’re generally looking for an ROE of more than 10%, so BHP clears this hurdle.
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.
