This section of the web-site and the information contained in it is presented to you as a wholesale client (as defined in the Corporations Act). If you do not qualify as a wholesale client, you should not proceed any further in this part of the website. Retail investors can access information about Redpoint’s products via the link here.

None of Redpoint Investment Pty Ltd ACN 152 313 758 AFSL 411671 (“Redpoint”), GSFM Pty Ltd ABN 14 125 715 004 AFS Licence No. 317587 and its subsidiary companies, or their officers, employees or agents guarantees the performance of any product identified in this web-site and expressly disclaim any liability for any loss or damage of any kind (including indirect or consequential losses) arising in connection with the information in this presentation or reliance on anything contained in or omitted from it. Before making an investment decision, you should obtain a copy of any relevant offer documentation of the investment and seek your own professional advice.

The content of this web-site is provided as at the date of entry (unless otherwise stated). Reliance should not be placed on information or opinions contained in this web-site and, subject only to any legal obligation to do so, Redpoint does not have any obligation to correct or update the content of this web-site.

This web-site does not purport to contain all information necessary to make an investment decision, is not intended as investment or financial advice (nor tax, accounting or legal advice), must not be relied upon as such and does not and will not form any part of any contract or commitment for the acquisition of securities in any named investments.

This web-site contains general financial product advice only and does not take into account your investment objectives, financial situation or particular needs.  Past performance should not be treated as a reliable indication of future performance.   Any investment decision should be made solely on the basis of your own enquiries. Before making an investment, you should consider whether such an investment is appropriate to your particular investment objectives, financial situation or needs.

Income Investing

BHPs sale of petroleum assets is great news for income investors

May 2022
Toby Bellingham
Portfolio Trader & Portfolio Manager

BHP have sold their petroleum assets to Woodside. Investors will receive Woodside Energy shares in the form of a fully franked dividend.

Woodside shareholders unanimously voted in favour of the proposed acquisition of BHP Petroleum from BHP Group at the Woodside AGM which was held on 19May 2022. The deal is expected to complete on 1st June 2022

BHP investors will receive proceeds from the sale in the form of Woodside shares. This is especially beneficial for low and nil tax rate payers as the shares are in the form of a fully franked dividend.  BHP shareholders will receive 0.1807 Woodside shares for every BHP share held on ex-date which is 25th May  May. Based on the closing share price of 1we estimate that shareholders will be entitled to a dividend, paid in Woodside shares, worth approximately A$5.43 which is a 12% yield on the BHP price, plus a fully franked dividend of $2.33, for a gross yield of just under 17%

BHP has already paid an attractive dividend this year, yielding over 10%,and including franking credits, a gross yield of almost 15%. The diversified miner is currently one of the biggest dividend payers in Australia thanks to the increased profits from high prices paid for its commodity production, especially iron ore.

This is a meaningful transaction for both companies. Woodside will becomethe 8thlargest company in Australia by market capitalisation and atop 10 global oil and gas producer. BHP, however, is in the process of changingits commodity mix, selling many of the fossil fuel assets that produce carbonemissions.

After this sale, and the anticipated sale of its remaining thermal coal assets in NSW, BHP will concentrate on commodities important for the energy transition which include iron ore and metallurgical coal for steel making, copper and nickel for renewable energy and batteries as well as potash(fertiliser) to meet the agricultural demands of a rising global population.  

These asset sales will reduce BHPs Scope 1 and 2 carbon emissions by approximately13%. These are emissions that are owned or controlled by BHP. Scope 3emissions, those produced both upstream and downstream from BHPs activities (by its suppliers and customers) but are beyond its control, will be reduced by approximately 21%.

The Redpoint Australia Equity Income Fund currently has an overweight position in BHP and holders of the fund will receive the full benefit of this transaction.  The fund is focused on capturing above average levels of income specifically for low and nil tax ratepayers such as retirees.

This document has been prepared by Redpoint Investment Management Pty Ltd (ABN 83 152 313 758, AFSL 411671) (Redpoint), the investment manager of the Strategy, in good faith (where applicable) using information from sources believed to be reliable and accurate and based on information that are correct and estimates, opinions, conclusions or recommendations that are reasonably held or made as at the time of preparation. All information is to be treated as confidential and may not be reproduced or redistributed in whole or in part in any manner without the prior written consent of Redpoint. GSFM Pty Limited (ABN 14 125 715 004, AFSL 321517) (GSFM), is an associate of Redpoint and is the distributor of the Strategy.

The information contained in this document constitutes general financial product advice only. It is intended for use by wholesale clients only and must not be made available to any retail client. This document is not intended for public use or distribution other than to the recipient of the document. This information is general in nature and does not take account of individual objectives, financial situation or needs. Before deciding to invest, investors should obtain independent financial advice.

Neither Redpoint, GSFM nor any of its related entities, directors or employees provide a warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Neither Redpoint, GSFM nor any of its related entities, directors or employees, guarantees the repayment of your capital, payment of income or the performance of your investment. Unless stated otherwise, all performance data for the products described in this document is before management fees. Past performance is not a reliable indicator of future performance. All information provided is up to date as at 31 August 2021 or otherwise stated. Redpoint and the logo shown are registered trademarks of Redpoint. Copyright 2021, Redpoint and/or its affiliates. All rights reserved.