The BHP Group Ltd (ASX:BHP) share price ended the month of February 2022 at almost exactly the same level where it started the month.
BHP is one of the largest resource businesses in the world. Its market capitalisation can change quite a lot over a month, depending on what's going on with the commodity prices and perhaps any wider economic or geopolitical goings-on.
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What happened during February 2022?
There are a few different things that featured heavily last month.
The Russian invasion of Ukraine has captured a lot of the global attention, sending the oil price above US$100 per barrel. Whilst BHP's oil division may be seeing a higher commodity price, it is going to be divested to Woodside Petroleum Limited (ASX: WPL) in the next few months.
However, on a more company-specific level, BHP reported its result for the six months to 31 December 2021.
It has also gone ex-dividend, meaning that new investors are no longer entitled to the US$1.50 per share interim dividend, reducing the short-term potential value of the shares to new investors.
Half-year result
For readers that didn't catch the result, BHP reported a significant increase in profits thanks to higher prices for all of its major commodities such as iron ore and copper.
The ASX resources share reported that attributable profit rose 144% to US$9.4 billion, whilst net operating cash flow rose 42% to US$13.3 billion.
Excluding the earnings from the petroleum assets, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 33% to US$18.5 billion, profit from operations rose 50% to US$14.8 billion, underlying attributable profit increased 57% to US$9.7 billion and net operating cash flow went up 26% to US$11.5 billion.
This large increase in profit and cash flow led to a 49% rise in the dividend to US$1.50 per share.
What does the future hold for the BHP share price?
It's impossible to know what a share price is going to do. But BHP management are confident about the outlook. The company points to population growth, the infrastructure of decarbonisation and rising living standards as reasons that can to drive demand for energy, metals and fertilisers for decades to come.
Management said that it's building on its strong foundations and capital discipline to reshape the business and grow long-term value for shareholders and other stakeholders.
It has unified the BHP corporate structure, which aims to make it easier to operate the company and carry out strategic moves.
The divestment of the petroleum business will mean the commodity portfolio is a bit 'greener', with plans to expand into potash with its Jensen stage one potash project in Canada. It is also progressing its divestments of certain coal assets.
What do analysts think about the BHP share price?
Plenty of analysts are a 'neutral' or 'hold' on the business
Macquarie still rates it as a buy, with a price target of $54 because of the fact that commodity prices remain strong which helps BHP.
The broker's estimates put the BHP share price at around 10x FY22's estimated earnings. BHP's projected grossed-up dividend yield is almost 13% for this financial year.
