Analysts Predict Steady Dividends for BHP Group Amid Share Price Dip

2 min read | August 23, 2024 11:10 AM AEST | By Team Kalkine Media

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BHP Group Ltd (ASX:BHP), one of the world's largest mining companies, remains a popular choice for investors seeking passive income through dividends. Despite fluctuations in commodity prices and a recent dip in its share price to a 52-week low, BHP continues to offer attractive dividend yields, making it a key player for dividend-focused portfolios.

Consensus Dividend Estimates for FY24 and Beyond

Analysts are forecasting a fully franked dividend of US$1.46 per share for FY24, equivalent to approximately AU$2.17 per share. Based on the current share price, this represents a solid 5.3% dividend yield, underlining BHP’s commitment to returning profits to shareholders.

It’s important to note that this full-year dividend includes the interim dividend of 72 US cents per share that BHP paid earlier in the year. Market expectations point to a final dividend of 74 US cents per share, which is approximately 110.4 Australian cents per share, to be announced next week.

Looking ahead, analysts at Goldman Sachs are projecting a fully franked dividend of US$1.23 per share (AU$1.835 per share) for FY25 and a US$1.21 per share (AU$1.805 per share) dividend for FY26. These projections suggest that while there may be a slight decline in the dividend amounts, BHP is likely to continue providing substantial payouts to its shareholders.

Calculating Potential Passive Income

For investors considering purchasing BHP shares at current levels, the following is an estimate of the passive income that could be generated over the next few years:

$10,000 Investment:

Next 13 months: US$481 or AU$717
FY26: US$295 or AU$440

$25,000 Investment:

Next 13 months: US$1,200 or AU$1,790
FY26: US$739 or AU$1,100

$2,000 Investment:

Next 13 months: US$97 or AU$145
FY26: US$59 or AU$88

These estimates illustrate the potential for consistent passive income, even with a moderate investment in BHP shares. The figures combine the expected final dividend for FY24 with the dividends forecasted for FY25, giving investors a clearer picture of the income stream over the next 13 months.

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