Is the BHP share price a buy today?

The BHP Group Ltd (ASX: BHP) share price has been hammered lower in 2020, but is it a good time to buy the Aussie miner for a bargain price?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BHP Group Ltd (ASX: BHP) share price has slumped 22.32% lower in 2020, but is it in the buy zone?

Why the BHP share price has slumped lower in 2020

As is the case with most ASX 200 shares right now, the coronavirus pandemic has triggered the BHP share price collapse. Government restrictions have put pressure on supply chains and operational capabilities.

On top of that, the mining sector has another concern. Reduced international trade and mass economic shutdowns have raised questions about the demand side of the equation. Add in heated diplomatic relations between Australia and our largest trade partner, China, and the BHP share price has a big question mark over it.

Is BHP a bargain buy or set to fall further?

A 22% decline in 5 months is worth paying attention to. However, it's not all doom and gloom for investors right now. China's economic activity looks to be picking back up after the initial pandemic shock. That's good news for BHP's earnings if trade does indeed increase.

On top of that, the Australian Government has flagged infrastructure as a potential economic booster. That means more steel needed for major roads, railways and other projects. As a dominant iron ore supplier, that puts BHP in a good position with higher iron ore prices and demand for its products.

The real question here is the unknown. If we knew the economy would pick back up again quickly, I think the BHP share price would be undervalued at its current price of $30.41. Unfortunately, that's not the case, so there is some guesswork involved.

Foolish takeaway

I wouldn't consider BHP to be good defensive buy right now. If you want portfolio protection, a non-cyclical dividend share like Coles Group Ltd (ASX: COL) might be a better bet.

However, if you're willing to take some risk, I think you could get some big rewards from the BHP share price in 2020 and beyond.

Should you invest $1,000 in Bhp Group right now?

Before you buy Bhp Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bhp Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

asx share price cut represented by scissors cutting through $100 note
Dividend Investing

Investing for passive income? Here's everything you need to know about the slashed Fortescue dividend

The Fortescue dividend took a hit, but the ASX 200 miner still trades at an attractive yield.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Earnings Results

Why did the Fortescue share price just plunge 7%?

Investors are punishing the Fortescue share price on Thursday. Let’s find out why.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Resources Shares

Guess which ASX 200 stock Goldman Sachs says could rise 50%

Let's see why the broker thinks the market is undervaluing this stock.

Read more »

A smiling miner wearing a high vis vest and yellow hardhat and working for Superior Resources does the thumbs up in front of an open pit copper mine, indicating positive news for the company's share price today following a significant copper discovery
Resources Shares

4 reasons to buy this top ASX 200 mining stock today

A leading expert forecasts more outperformance for this surging ASX mining stock.

Read more »

ASX gold share price.
Resources Shares

Goldman Sachs upgrades its gold price forecast

The gold price is currently trading 0.64% higher at US$2,899 per ounce.

Read more »

Female miner on a walkie talkie.
Resources Shares

Buying Rio Tinto shares? Here's how the ASX 200 miner weathered Cyclone Zelia

Rio Tinto’s iron ore operations have been impacted by a series of cyclones.

Read more »

Three people with gold streamers celebrate good news.
Resources Shares

What to know about ASX gold shares for 2025

Here’s what you need to know about this sector with a golden outlook.

Read more »

Miner looking at a tablet.
Resources Shares

Down 10% in a year, are BHP shares now a buy?

Are BHP shares a buy before the miner reports its half-year results on Thursday?

Read more »