Foresight Energy (FELP) versus BHP Billiton (BBL) Financial Analysis

Foresight Energy (NYSE: FELP) and BHP Billiton (NYSE:BBL) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

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6.3% of Foresight Energy shares are owned by institutional investors. Comparatively, 4.1% of BHP Billiton shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Foresight Energy and BHP Billiton’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Foresight Energy $954.53 million 0.53 -$215.23 million N/A N/A
BHP Billiton $38.29 billion 1.15 $5.89 billion $2.53 16.42

BHP Billiton has higher revenue and earnings than Foresight Energy.

Dividends

Foresight Energy pays an annual dividend of $0.23 per share and has a dividend yield of 6.6%. BHP Billiton pays an annual dividend of $1.96 per share and has a dividend yield of 4.7%. BHP Billiton pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Foresight Energy has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, BHP Billiton has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Foresight Energy and BHP Billiton, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foresight Energy 0 3 0 0 2.00
BHP Billiton 0 4 1 0 2.20

Foresight Energy presently has a consensus price target of $4.83, suggesting a potential upside of 38.49%. BHP Billiton has a consensus price target of $38.00, suggesting a potential downside of 8.50%. Given Foresight Energy’s higher probable upside, equities analysts plainly believe Foresight Energy is more favorable than BHP Billiton.

Profitability

This table compares Foresight Energy and BHP Billiton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foresight Energy -18.78% -3.93% -1.18%
BHP Billiton N/A N/A N/A

Summary

BHP Billiton beats Foresight Energy on 9 of the 13 factors compared between the two stocks.

About Foresight Energy

Foresight Energy LP engages in the development, mining, production, marketing, transportation, and sale of thermal coal primarily in the eastern United States and internationally. As of March 7, 2018, the company operated two longwall mining complexes with three longwall mining systems in Williamson and Sugar Camp; one continuous mining operation in Macoupin; and the Sitran river terminal on the Ohio River. It controls approximately 2 billion tons of coal reserves in the Illinois Basin. The company sells its coal to electric utility and industrial companies. Foresight Energy GP LLC acts as a general partner for Foresight Energy LP. The company was formerly known as Foresight Energy Partners LP and changed its name to Foresight Energy LP in April 2014. Foresight Energy LP was founded in 2006 and is headquartered in St. Louis, Missouri.

About BHP Billiton

BHP Billiton Plc, together with its subsidiaries, discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for copper, silver, lead, zinc, molybdenum, uranium, gold, and iron ores, as well as metallurgical coal, thermal energy coal, and oil and gas properties. It also engages in the mining, smelting, and refining of nickel; the provision of freight, finance, and administrative services, as well as trading, marketing, and support services; and potash development activities. The company was formerly known as Billiton Plc. The company was incorporated in 1996 and is based in London, the United Kingdom. BHP Billiton Plc is a subsidiary of BHP Billiton Group.

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