The BHP Group Ltd (ASX: BHP) share price has come under pressure over the past few weeks, following the worsening of the coronavirus outbreak. Many other shares in the ASX resources sector, including the Rio Tinto Limited (ASX: RIO) share price, have also felt the impact of concerns that the outbreak could slow global economic growth and negatively impact commodity prices.
With BHP's share price down by 14.3% YTD to $33.36 at the time of writing, does this present investors with a buying opportunity?
Recent financials show BHP is in a solid market position
BHP's recent financial report suggests to me that the global mining giant remains in a very solid market position, despite a challenging market environment.
BHP recently announced that for half year results for FY 2020, it recorded attributable profit of US$4.9 billion, which was up 39% from the prior period. BHP's profit from operations came in at US$8.3 billion.
The mining giant reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$12.1 billion at a margin of 56%, with production and unit costs for all its major assets on track to achieve full year guidance.
BHP's strong operating cash flow of US$7.4 billion reflected higher iron ore prices and a solid overall operating performance, underpinning a strong balance sheet.
Capital investments and exploration are well on track
BHP's current projects are tracking well, with 2 major projects expected to achieve first production within the next 12 months.
Investment in the Ruby oil and gas project in Trinidad and Tobago was approved late last year. Also, the advancement of its exploration programs in petroleum and copper continues, with the third phase of the drilling program at Oak Dam in South Australia expected to be completed in the June 2020 quarter.
BHP declared its second highest ordinary dividend of 65 US cents per share (cps), which includes an additional amount of 14 US cps above the 50% minimum payout policy. This now makes BHP's dividend yield very appealing.
Guidance for the 2020 and 2021 financial years remains unchanged, however, the mining giant did comment that if the coronavirus outbreak is not well contained within the March quarter, it expects to revise its expectations. With the chances of the coronavirus not being contained in that time-frame now looking increasingly likely, a revision of BHP's guidance could be on the cards which could see a short-term hit to its share price.
Foolish Takeaway
Despite the current market volatility, I think that right now could be a buying opportunity, for patient investors with a long-term investment horizon.
The global economy's demand for iron, coal and copper, will be here long after the coronavirus outbreak is over. It's impossible to pick the bottom of the market, and with BHP's share price down by over 10% over the last week or two, I think it's well worth considering purchasing shares if you would like to gain some additional exposure to the mining sector.
As a bonus, BHP shares currently offer a very generous dividend yield of 6.2%, fully franked.
