5 Value Stocks to Buy in 2022 According to Ken Fisher

2. BHP Group Limited (NYSE:BHP)

Fisher Asset Management’s Stake Value: $1.30 billion

Number of Hedge Fund Holders: 25

P/E Ratio: 11.6

BHP Group Limited (NYSE:BHP) is an Australia based mining company. It is also the second largest mining corporation in the world. It is involved in mining iron-ore, copper, nickel and petroleum products among others. The stock makes up 0.77% of Fisher Asset Management’s portfolio with a stake worth $1.3 billion in the first quarter of 2022.  It was also the leading stakeholder in the company in the same quarter.

The mining company was mentioned in Harding Loevner‘s Q1, 2021 letter. This is what it had to say:

“Our purchase of Australian mining company BHP is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low-cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”

Citi analyst Ephrem Ravi raised the price target for BHP Group Limited (NYSE:BHP)  to ‘Buy’ from Neutral with a price target of $4,038, up from $3,470. Ravi told investors in a research note that BHP Group’s cash flows are “up strongly” on Citi’s revised iron-ore price deck and its market outperformance can keep going on. He said that Citi anticipates iron-ore prices to “stay higher for longer” and that BHP’s cash flow is hard to ignore.

With a debt to equity ratio of 0.37 in the last quarter of 2021, BHP Group has strong finances going forward. The company has a dividend yield of 11.25% as of May 26. The company’s recent dividend payout was $3 per share on March 28, 2022, down by 25% in the dividend payout of September, 2021.