BHP.ASX announced FY16 EBITDA $12b and underlying EBIT $3.5b. There was over $7b in impairments and management’s cost out performance in Copper, Coal and Petroleum will help to improve BHP’s earnings and cash flow into FY17 and FY18.
On forward basis we have BHP in FY17 paying out $0.35 DPS, placing the stock on a 2.2% yield.
No signal present: We currently hold BHP in the model and have sold Nov $22.50 calls to enhance the return.
Author: Leon Hinde
Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.
PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:
· Deposit Products
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks