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BHP Group (BHP Group) Graham Number

: $35.90 (As of Dec. 2021)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-04-23), the stock price of BHP Group is $64.18. BHP Group's graham number for the quarter that ended in Dec. 2021 was $35.90. Therefore, BHP Group's Price to Graham Number ratio for today is 1.79.

The historical rank and industry rank for BHP Group's Graham Number or its related term are showing as below:

BBL's Price-to-Graham-Number is not ranked *
in the Metals & Mining industry.
Industry Median: 1.15
* Ranked among companies with meaningful Price-to-Graham-Number only.

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


BHP Group Graham Number Historical Data

The historical data trend for BHP Group's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

BHP Group Annual Data
Trend Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21
Graham Number
Get a 7-Day Free Trial Premium Member Only Premium Member Only 32.81 33.98 37.15 35.96 44.47

BHP Group Semi-Annual Data
Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21
Graham Number Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 39.64 35.96 34.06 44.47 35.90

Competitive Comparison

For the Other Industrial Metals & Mining subindustry, BHP Group's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


BHP Group Price-to-Graham-Number Distribution

For the Metals & Mining industry and Basic Materials sector, BHP Group's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where BHP Group's Price-to-Graham-Number falls into.



BHP Group Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

BHP Group's Graham Number for the fiscal year that ended in Jun. 2021 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*19.703*4.46)
=44.47

BHP Group's Graham Number for the quarter that ended in Dec. 2021 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*19.555*2.93)
=35.90

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


BHP Group  (NYSE:BBL) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

BHP Group's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Dec. 2021 )
=64.18/35.90
=1.79

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


BHP Group Graham Number Related Terms

Thank you for viewing the detailed overview of BHP Group's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


BHP Group (BHP Group) Business Description

Traded in Other Exchanges
N/A
Address
160 Victoria Street, Nova South, London, GBR, SW1E 5LB
BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.

BHP Group (BHP Group) Headlines

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