Macquarie Says that Mergers Unlikely for BHP Billition; Company Will Cut Expenses (BHP)
The new CEO of diversified natural resource company BHP Billiton Limited (BHP) Andrew Mackenzie is committed to cutting expenses, getting lean, and increasing productivity as a way to improve margins while the company struggles, according to a report by analysts at Macquarie.
Analysts at Macquarie believe that the company’s current $22 billion in capital expenditures is unsustainable and that there is no reason to commit to any new capital investments in the near term. BHP will more than likely not be searching for any new mergers in the future.
The analysts say that BHP will continue to sell off assets, albeit at a slow pace. For example, the company has taken two years to dump its diamond business.
Investors need to sit tight and be patient as the company is in this transitional period.
Macquarie currently rates BHP as “Neutral.”
BHP Billiton shares were down 85 cents, or -1.14%, during pre-market trading on Friday. The stock is down -3.77% over the past twelve months.
The Bottom Line
Shares of BHP Billiton (BHP) have a dividend yield of 2.70% based on last night’s closing price of $74.86 and the company’s annualized dividend payout of $2.02 per share.
BHP Billiton Limited (BHP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.
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