Owners and prospective investors of BHP Group Ltd (ASX: BHP) stock will want to know that the boss of the ASX mining share is feeling very positive.
According to reporting by The Australian, Mike Henry answered shareholders' questions this week about the ASX iron ore share.
He addressed several topics, and I will cover a few of them here.
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Diversification
Henry believes that the business is well-positioned because its portfolio is spread across iron ore, copper and potash, giving good diversification. It also has a "high quality steelmaking coal business".
The company recently decided to stop producing nickel, with the commodity price significantly lower due to competition from low-cost Indonesian nickel.
The Australian reported that Henry said:
We are so much better placed today than we were a few years ago in terms of growth optionality in the portfolio, both potash and copper.
The BHP boss said there is competition for capital between the different commodities and growth options, which is a "great conundrum" for the company to resolve. He added:
In the coming months and years, I'm really optimistic about the growth outlook for the company.
…this is a very resilient portfolio, one that's going to allow us to deliver great returns for shareholders over the decades to come.
Copper
BHP is looking to copper as an important commodity for its future because of its widespread application, including its use for global electrification.
The business has a proposed expansion of its South Australian copper output to more than 500kt by the early 2030s.
Henry gave some commentary about copper:
A big focus of our results presentation this time was on the copper optionality in the portfolio and revealing more detail about copper growth options in Chile, in copper in South Australia, and more recent acquisitions we've made in Argentina.
Balance sheet
The Australian reported that the chief financial officer, Vandita Pant, believes the balance sheet is in "fantastic shape". The debt level of the balance sheet is currently in the middle of the company's target range of between US$5 billion to US$15 billion.
BHP stock dividends
BHP's leadership was also asked about the reducing dividend from the ASX mining share.
The mining giant has continued with its minimum dividend payout ratio of at least 50% of net profit. Aside from the falling profit being an issue, BHP has also been balancing dividend payments, growth projects and its balance sheet strength.
Pant then said:
In the last three years, we have been one of the highest dividend payers across industries globally.
If I were to include the dividend that we just announced of US$3.8 billion with the full year results, our shareholder returns in dividends in the last three years have been US$42 billion.
BHP stock price snapshot
Despite the rally of recent weeks, the BHP share price is still down by 15% in 2024 to date, as shown on the chart below.
