BHP Group Ltd (ASX: BHP) shares are attractive, according to one expert.
BHP is the biggest S&P/ASX 200 Index (ASX: XJO) mining share. It has a market capitalisation of $210 billion, according to the ASX.
The mining business recently reported its FY22 result. Brad Potter from Tyndall said on Livewire Markets that the result was a "genuine standout, with outstanding cash flow performance helping to support a pristine balance sheet despite still finding room for a stellar dividend".
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What happened with this ASX 200 mining share in FY22?
The company reported a variety of strong growth numbers.
Firstly, let's look at the continuing operations, which excludes the oil and gas segment that BHP divested to Woodside Energy Group Ltd (ASX: WDS).
BHP's profit from operations grew 34% to $34.1 billion. Its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 16% to $40.6 billion. Underlying attributable profit grew 26% to $21.3 billion and net operating cash flow went up 13% to $29.3 billion.
This profit growth allowed the resources giant to raise its dividend for investors further. This was despite the very large dividend paid last year. BHP's annual dividend increased 8% to US$3.25 per share.
What did the expert say about BHP shares?
Potter recently said on a podcast about the ASX 200 mining share:
BHP – the big Australian – was the standout, reporting an inline result. However, cash flows were substantially better. The net result was that the company only has net debt of $300 million versus $6 billion at the interim result. The dividend payout of US$1.75 per share implies a strong yield of 6% for the half, or 8.6% grossed up for franking credits.
That is an incredible result, and over the full year the dividend was nearly 16% when grossed up for franking credits.
In terms of the annual comparisons, BHP said its net debt improved by 92% to US$333 million in FY22.
Management comments on the future
BHP CEO Mike Henry had some positive words to say about the ASX 200 mining share's outlook:
BHP enters the 2023 financial year in great shape strategically, operationally and financially, and well prepared to manage an uncertain near-term environment. During the year, we unified BHP's corporate structure, merged our petroleum business with Woodside, completed the sales of our interests in the BMC and Cerrejon energy coal assets, and decided to retain and operate our New South Wales Energy Coal business until mine closure in 2030. We have improved our platform for growth through the Jansen potash project, iron ore and copper.
We are pursuing options to deliver greater value for shareholders by growing the business and our exposure to future-facing commodities. At Western Australia Iron Ore, the ramp-up of South Flank is ahead of schedule and we have revised our medium-term production guidance to more than 300 mt per annum. In the 2023 financial year, we are assessing expansion alternatives to take us toward 330 mt per annum.
BHP share price snapshot
Over the past month, BHP shares have risen around 10%.
