For a number of weeks, FTSE 100 commodity producer BHP Group (LON: BHP) has been sitting in my Stock in Focus screening results. I have to admit that until now, I’ve avoided considering this stock for the SIF portfolio.
There have been legitimate reasons for this. Other suitable stocks have ranked more highly in my screening results, which are ordered by StockRank. The shares also overlapped with former holding Anglo Pacific, which I sold in August. But I’ve also had concerns about the outlook for the shares.
In general, I view BHP as an attractive stock to hold for the long term. It’s diversified, with good quality assets and a strong tradition of dividends. Much of the group’s asset base is located in developed markets such as Australia and the US, providing welcome political and regulatory stability.
In short, I think this Anglo-Australian giant is a great way for private investors to generate an income from a basket of commodities.
However, this is a stock that I’d prefer to buy during a full-blown bear market. That’s not the case at the moment, leaving us with the difficult challenge of a mid-cycle valuation. This…
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