For long term investors, the positive outlook recently issued by BHP Billiton (NYSE: BHP) is very bullish news.
BHP BIlliton is the world’s largest natural resources company.
In that capacity, it has operations spanning the globe. The better China does, the better it is for BHP BIlliton. China gobbles up many of the industrial metals that BHP Billiton sells, such as coal and iron ore. But BHP Billiton is also becoming more a play in oil and natural gas.
Due to tepid growth in China, BHP Billiton has been weak in recent market action. BHP Billiton is off for the last week, month, quarter, six months, and year of market action (chart below). For 2014, BHP Billiton has fallen by more than 13 percent.
But BHP BIlliton has very impressive margins, and other financial indicators.
The company has a profit margin of 37.30 percent. That is far higher than those for Apple (NASDAQ: AAPL) or MIcrosoft (NASDAQ: MSFT), as examples. BHP Billiton also has solid growth projected. Due to it size, BHP Billiton is not going to be posting huge growth numbers. With a market capitalization of more than $150 billion, it is simply too big.
The dividend yield for BHP Billiton is big, too.
At present, the dividend yield is 4.34 percent. That is much higher than those for Microsoft or Apple. It is also more than twice as high as the average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY).The bullish outlook for BHP Billiton is bullish for the dividend, too. Income investors should take comfort in the history of growth for the amount of the dividend.
For long term investors, BHP Billiton should be a core holding. The projected growth along with the dividend should add up to a rewarding total return. The bullish outlook from the company should add to the appeal of BHP Billiton for long term investors.
