BHP is a great company, but I think this ASX stock is a better investment

I'm more bullish on this global business than BHP.

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Key points

  • Over the past five years, BHP has seen capital growth exceeding 30%. 
  • Breville is expanding its geographic footprint, focusing on markets such as China and the Middle East, and boosting its total addressable market through popular products like coffee machines and small appliances.
  • Despite not being a high-growth tech stock, Breville shows promising growth in revenue and profit margins, with a favourable share valuation and projected 35% EPS growth by FY28, indicating a strong investment potential post recent price decline.

Owning BHP Group Ltd (ASX: BHP) shares over the last five years has been a decent investment choice. The ASX stock has delivered capital growth of more than 30% (at the time of writing), as well as sizeable dividend payments.

BHP mines a number of commodities, including iron ore, copper, and coal. The iron ore segment is heavily reliant on Chinese buying, and we've recently seen the two parties in a disagreement, with the miner and the central Chinese iron ore buyer in negotiations.

It can be somewhat risky when so much of a company's output is sold to a particular customer because of the reliance on that customer's demand.

There are other ASX stocks that are benefiting from tapping into global demand.

There's one business I'd like to tell you about that has an impressive geographic footprint. I'm planning to invest in some shares soon.

Breville Group Ltd (ASX: BRG)

Breville is best known for the coffee machines it sells worldwide, although it also manufactures and sells other small home appliances. Plus, it sells coffee beans through its brand called Beanz.

The company continues to expand geographically, which means the business is growing its total addressable market (TAM). Selling its well-liked products in more countries should result in rising revenue and profit.

In its FY25 results, it highlighted its launch in China and the Middle East, as well as further South Korea expansion (including Baratza). Asia is a large market for the business to tap into, with a growing coffee culture there.

Breville is not a rocketing ASX tech stock, but it's delivering pleasing compound growth, which I expect can continue (aside from US tariff disruptions in FY26). FY25 revenue rose 10.9% (with good growth in multiple global operating regions) and net profit grew 14.6%. Rising profit margins and operating leverage is a positive sign for future profit growth.

In terms of US tariffs, the company is working hard to diversify its manufacturing from the US market, with a particular focus on Mexico to reduce the impact of the tariffs.

The forecast on Commsec suggests the Breville share price is valued at less than 31x FY26's estimated earnings, at the time of writing. Earnings per share (EPS) is predicted to grow by 35% between FY26 and FY28.

I think this ASX stock can deliver much more profit growth than BHP over the next few years, and it looks like a good time to buy following a 21% decline since 21 August.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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