The BHP Billiton (ASX:BHP) share price has jumped 44 per cent higher in the last 12 months, making it one of the top performing ASX 200 stocks over that period.
BHP shares are currently trading at $34, but analysts at Macquarie think there could be further gains ahead.
According to a note out of the investment bank, Macquarie analysts have an outperform rating on BHP shares, and a $38 share price target.
That implies a further 11 per cent upside to BHP shares, not including the company’s fully franked dividend.
And BHP’s dividend shouldn’t be ignored. While commodity prices are high, and with BHP focused on productivity and not on value destroying acquisitions, the mining giant will be spewing cash.
According to Commsec, the BHP full year dividend for FY18 will be around $1.60, meaning BHP shares trade on a forecast fully franked dividend yield of 4.7 per cent, or 6.7 per cent when grossed up for franking credits.
According to the Macquarie note, the broker expects BHP to complete the sale of its shale assets in 2018. This will give BHP a significant cash balance to use for share buybacks.
Last month, BHP Chief Executive Andrew Mackenzie said its pipeline of new opportunities has the potential to add a further 40 per cent to the value of BHP.
BHP is a member of The Capital Club 10, a basket of ASX 200 companies I think will beat the traditional blue chips over the next 3 years.
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