What Is Going On at BHP? Massive Dividends, Huge Demand for Materials, Yet Stock Is Down

In these very interesting days in which good old fashioned raw materials are making a comeback in the markets, a very surprising thing has occurred.

BHP Billiton, which is a vast multinational mining, metals and petroleum company with various public listings on major stock exchanges globally, has been doing extremely well recently, which is to be expected as it is in line with the huge demand for elements and materials extracted from the ground ranging from oil and gas to lithium for making batteries for electric cars to materials to manufacture semiconductors, which have been in short supply for over a year now.

As if that hasn't been proof enough that the attempted greenwash by certain governments is purely an agenda which has been written off by most of the world's industrial and domestic consumers as whimsical and impractical posturing, there is another clear indicator that what comes out of the ground will continue to come out of the ground: rising commodity prices. Both of these factors have led BHP Billiton to huge profits recently, and this week the company is paying out a record $7.6 billion in dividends for the first half of its financial year.

Why, in that case, is this not being reflected in its share price? It would be an easy conclusion to look at BHP Billiton's London Stock Exchange listing and draw a conclusion that its delisting from London which was announced at the end of last month would have been enough to keep its stock prices on the decline until it removed its listing, and the astonishing 36% drop in its stock prices over the past five days would be enough to demonstrate that sentiment clearly.

The largest mining company in the world announcing a record dividend, and the stock is crashing. That is the confusion brought by a de-listing. Therefore, it would be perhaps a natural assumption that BHP Billiton's performance on its native Australian exchange (ASX) in Sydney would be stellar.

Well, no. BHP Group stock on the ASX exchange is down 0.8% over the five-day trading average, and it is down 1.76% during today's Sydney trading session.

The company, which last month abandoned the FTSE 100 and the London Stock Exchange for good as a result of it having done away with its dual corporate structure, is, therefore, an anomaly among big-cap stocks.

Western newspapers have been running endless sensationalist stories about a potential conflict between Russia and Ukraine. However, nothing has occurred yet, but the endless coverage and display of anti-Russian sentiment by Western governments have led to the perception that should any of these Western leaders get involved in Russian politics when they already have applied a whole list of sanctions against Russia, President Putin may respond by cutting off the supply of raw materials, which would mean fuel rationing and 95% of Europe's gas supply being curtailed.

This could lead to a conclusion being drawn that companies such as BHP Billiton which mine resources across the globe outside the main OPEC region would be in for a massive surge in demand should the OPEC nations begin to band together to use their resources as a bargaining tool against the West's sanctions or intrusion in political affairs.

Therefore, BHP Billiton remains an anomaly.

A huge company whose products are in high demand, with geopolitics on its side, and an unremitting thirst for fossil fuels and raw materials among, well, everyone in the world, and commodities prices that are at stratospheric levels. Surely its stock should be reaching for the sky... but instead, it is almost laying on the same ground, which BHP is digging away at.