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BHP Billiton Limited Message Board

  • m1975johnson1975 m1975johnson1975 Mar 28, 2013 6:31 AM Flag

    why such low pe?

    net income in 2011 and 2012 was 31 and 23 billion. so 2012 they did 8.51 per share. gives them ttm pe of 8. Am I missing something? please help

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    • Here is UBS's projections for BBL:
      5yr av 6/12 6/13E 6/14E 6/15E
      PE (UBS): 11.0 9.7 13.4 13.0 13.4
      Net dividend yield % 3.1 3.6 3.6 3.8 4.1

      PE's would be slightly higher for the BHP ADR due to the price differential with BBL
      Dividend figures would be slightly lower for the BHP ADR due to the price differential with BBL.

    • BHP Billiton Group is a Dual Listed Company [two companies operating as if merged, consolidated financial basis], and Yahoo charts do not deal with a DLC's numbers very well. First of all "BHP" is the US ADR for two shares of the Australian part of the DLC: BHP.AX. BBL is the US ADR for two shares of the UK part of the DLC: BLT.L.

      So if the consolidated earnings of the DLC for FY ending 30 June 2011 was $31bn, and there are 5.5bn total shares of the Group outstanding, the EPS is 31/5.5 = $5.64. The price of the underlying BHP.AX share is A$32.36 [US$ 37.81] then the ttm is 37.81/5.64 = 6.7

      If the consolidated earnings for FY ending 30 June 2012 was $23bn, the Group EPS is 23/5.5 = 4.18, and the ttm is 37.81/4.18 = 9.0.

      In other words, what Yahoo fails to do is combine the shares and financials and use the US price of the underlying share. It gets even more confusing if you base the calculation on the BLT.L shares, because they sell at a big discount to BHP.AX shares for some unkown reason, even though they represent the same ownership, vote and US$ equivalent dividend. Clear?

 
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