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Highlights
- Dividend Decline: BHP's share of global dividend payouts drops as the mining sector faces cuts, shifting focus to other industries.
- Global Trends: Global dividends reached a Q3 record of AU$431.1 billion, with significant contributions from U.S. tech and Chinese firms.
- BHP's Future Outlook: Despite the dip in dividend rankings, Goldman Sachs maintains a "buy" rating on BHP, citing strong prospects in Chilean copper operations.
BHP Group Ltd (ASX:BHP), once a leader in global dividend payouts, has fallen out of the top 20 dividend payers worldwide, according to the latest Janus Henderson Global Dividend Index. While the mining giant's total payout has grown significantly from 19.5 cents per share in 2005 to AU$2.22 per share over the past 12 months, it has been overshadowed by cuts in the mining sector and a broader global shift in dividend distribution.
Why Did BHP Drop Out of the Top 20?
Despite its impressive dividend growth over nearly two decades, BHP’s decline in global rankings is tied to broader trends within the mining sector. The Janus Henderson report reveals a 3.1% year-on-year growth in global dividends in Q3 2024, totaling a record AU$431.1 billion. However, many resource-heavy nations like Australia have seen softer payouts due to declining commodity prices. BHP’s decline reflects this pattern, with the company’s recent quarterly dividends overshadowed by cuts across the mining industry.
In the past, BHP ranked among the top 10 dividend payers for six of the last seven years, including securing the second-largest position in Q3 2022. However, by Q3 2024, BHP no longer appeared in the top 20, as companies from other sectors like U.S. tech and Chinese firms have taken the lead in dividend distributions.
Global Dividend Dynamics Shift
The Janus Henderson report highlights the shifting landscape of global dividends. While the U.S. and Asia-Pacific (excluding Japan) have contributed significantly to the overall dividend growth, it's the dominance of tech companies—like Alphabet and Microsoft—that has propelled these sectors to the forefront. Chinese companies also boosted payouts, with China Construction Bank leading the list, a position it has maintained since 2018, aside from a brief moment when BHP overtook it in 2021.
Is There Still Value in BHP Shares?
Despite its fall from the global dividend elite, Goldman Sachs remains bullish on BHP. The brokerage maintains a buy rating on the stock, with a AU$47.30 price target. The investment firm is particularly optimistic about BHP’s strategic investments in its Chilean copper operations, which could significantly boost production—up to 0.5 million tonnes annually.
With copper being a key material for the energy transition, demand for the metal is expected to surge in the coming decade. While BHP's dividend payouts may have dipped, its long-term growth prospects, especially in copper, continue to make it a valuable player in the mining sector.
