Mining heavyweight BHP Billiton (ASX: BHP) could be on the verge of a large capital return to shareholders in the form of a share buyback program sooner than expected. This would push up the value of the miner.
BHP's CEO Andrew Mackenzie had previously indicated that the company would consider capital management action once the company's net debt fell below $25 billion. However, while the last reported net debt figure stood at $29 billion, with a large capex pipeline ahead that capital return could come sooner rather than later.
BHP has struggled to keep up with the rest of the market, returning just 1% last year compared to the S&P/ASX 200's (Index: ^AXJO) (ASX: XJO) 15% gain. In order to appease shareholders, the company may sell various non-core assets in order to accelerate the timing of capital management action which would help push the shares' value upwards.
Foolish takeaway
Although there are risks facing the sector, BHP represents a safer bet than others in the industry including Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG). This is due to its level of diversification.
Want fantastic shareholder returns and great growth opportunities?
