Anglo American have released their interim numbers to end June this morning, to view the interim presentation follow the link. Even if Anglo manage to make around the same as last year, 2.10 Dollars in earnings and pay the same dividend of 85 US cents (in a lower commodity price environment), surely there are better investment options.
Quick math, Anglo trades at 286.5 Rand a share, translate that into Dollars you get to a 13 multiple. However, the expectations are for the company to earn less than that, somewhere in the region of 1.8 Dollars per share, meaning that forward the company is trading on an earnings multiple of 15 times. I can buy BHP Billiton on less than that, their assets are better, energy is more attractive (to us) than diamonds and platinum. Plus the yield is hardly a kings ransom, 3.1 percent before tax compared to BHP Billiton yield of 3.5 percent. And as far as the turnaround, I suspect that is over 24 months ago. We continue to favour BHP Billiton over Anglo American and at these prices is in my view a sell.