You’d think investing in a company that looks nailed-on to pay record returns to shareholders would be a no-brainer, but the market has placed a fairly unremarkable enterprise value on BHP, one of its powerhouse miners. That might be an acknowledgment that the blistering surge in iron ore prices that has greeted the rebound in demand for the steelmaking ingredient is not here to stay for much longer.
A rocketing iron price lit the fire under BHP’s profit recovery this year, accounting for more than two thirds of earnings before interest, tax depreciation and amortisation during the first six months of the year. A recovery in demand and a tightening in supply amid pandemic disruption to mining operations has given the commodity a scarcity
