Analyzing Exxaro Resources (OTCMKTS:EXXAY) and BHP Group (NYSE:BHP)

BHP Group (NYSE:BHP) and Exxaro Resources (OTCMKTS:EXXAY) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares BHP Group and Exxaro Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BHP Group	N/A	N/A	N/A
Exxaro Resources	N/A	N/A	N/A

Risk & Volatility

BHP Group has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Exxaro Resources has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Dividends

BHP Group pays an annual dividend of $1.97 per share and has a dividend yield of 4.0%. Exxaro Resources pays an annual dividend of $0.56 per share and has a dividend yield of 6.9%. BHP Group pays out 44.8% of its earnings in the form of a dividend.

Insider and Institutional Ownership

3.8% of BHP Group shares are held by institutional investors. 0.0% of BHP Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares BHP Group and Exxaro Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BHP Group	$53.60 billion	2.32	$7.90 billion	$4.40	11.12
Exxaro Resources	$1.78 billion	1.63	$679.76 million	N/A	N/A

BHP Group has higher revenue and earnings than Exxaro Resources.

Analyst Recommendations

This is a breakdown of recent recommendations for BHP Group and Exxaro Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BHP Group	0	2	2	2	3.00
Exxaro Resources	0	0	0	0	0.00

BHP Group presently has a consensus target price of $53.00, suggesting a potential upside of 8.28%. Given BHP Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe BHP Group is more favorable than Exxaro Resources.

Summary

BHP Group beats Exxaro Resources on 9 of the 12 factors compared between the two stocks.

About BHP Group

BHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. The company operates through Copper, Iron Ore, and Coal segments. It engages in the mining of copper, uranium, gold, zinc, lead, molybdenum, silver, iron ore, cobalt, and metallurgical and energy coal. The company is also involved in the mining, smelting, and refining of nickel, as well as potash development activities. In addition, it provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services. The company was founded in 1851 and is headquartered in Melbourne, Australia.

About Exxaro Resources

Exxaro Resources Limited engages in coal, iron ore investment, pigment manufacturing, renewable energy, and residual base metal businesses in South Africa, Europe, the United States, and Australia. The company operates through Coal; Ferrous; Energy; and Other segments. It produces thermal coal, metallurgical coal, and semi-soft coking coal products primarily in the Waterberg and Mpumalanga regions; offers gas-atomised ferrosilicon for use in separation plants, as well as iron ore; and operates two wind farms. The company was formerly known as Kumba Iron Ore Limited and changed its name to Exxaro Resources Limited in November 2006. The company is based in Pretoria, South Africa.