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 that produces commodities for energy use and manufacturing.
BHP’s core business lines are mineral exploration and production. BHP’s assets, operations and interests are separated into three focus areas: copper and related minerals (e.g. gold, uranium, silver, zinc, etc.); iron ore; and coal (i.e. metallurgical and energy). While these categories make up the bulk of revenue and profit, the company is also diversifying into other areas such as fertiliser.
BHP shares have long been viewed as a reliable dividend-paying investment and are a common member of Australian share portfolios. It’s also one of the largest companies in Australia so if you own an ASX 200 ETF or LIC, or even have money in superannuation, 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.
