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BHP Billiton (BHP) $48.18

BHP -0.31%: A wild ride for BHP today after reporting a strong 1H22 result and bumper dividend on a day where Iron Ore fell ~10% in Asia and Energy stocks pulled back from recent highs. In terms of the result, it was strong on most metrics – from NPAT to dividend – a 1H record. NPAT from total operations (including petroleum) of US$10.7bn beat the prior 1H NPAT record ($6.1bn 1H21) by ~75%. 1H22 was also BHP’s 2nd highest HY NPAT falling just short of 2H21’s $11.1bn. Clearly, with some headroom in earnings BHP was able to deliver the highest 1H dividend ever at $1.50/sh ahead of consensus at $1.24, which equates to around A$2.10. On first read through this morning we said that it was an 8% beat at the profit line however that was driven by a lower tax rate at ~31% vs ~37%, hence operationally it was more like more a 1-2% beat when tax adjusted. In any case, a solid result from BHP and the stocks would have rallied had it not been for Iron Ore weakness. In terms of ‘what next’ for the Big Australian, commodity prices will now be a greater driver of their fortunes given the unification has now been complete, while the demerger of their petroleum  business will be wrapped up in the June quarter.

BHP
We remain bullish BHP, although we have trimmed our position recently
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BHP Billiton (BHP)
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