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Highlights
- BHP shares lost 21.5% in 2024, underperforming the broader market.
- Despite the drop, BHP’s dividend payout of AU$2.20 per share provided a 4.35% yield.
- Goldman Sachs sees potential upside of 19%, with an expected dividend of AU$1.58 per share in 2025.
BHP Group Ltd (ASX:BHP), one of the world’s largest mining companies, had a difficult 2024, with its shares significantly underperforming the broader market. Despite being a major dividend payer, the company’s stock lost 21.5% of its value over the year, as investors moved their capital toward the big four banks, which saw record highs.
BHP's 2024 Performance
BHP’s struggles in 2024 can be attributed to a combination of factors. The company’s share price faced downward pressure from weaker commodity prices, concerns over China’s economic growth, and rising cost inflation within the mining sector. Furthermore, a failed takeover bid for Anglo American (LSE:AAL) weighed heavily on investor sentiment.
Despite these challenges, BHP remained a reliable dividend payer. The company rewarded shareholders with dividends totaling approximately AU$2.20 per share, providing a dividend yield of 4.35% based on the share price of AU$50.41 at the end of 2023. However, even factoring in dividends, BHP’s performance still lagged behind the ASX 200 Index, which rose 11% in 2024.
Looking Ahead to 2025
While 2024 was a tough year for BHP, there are reasons for optimism heading into 2025. Goldman Sachs sees potential in the company, rating its shares as a buy with a price target of AU$47.40. This target implies a 19% upside from the current share price of AU$39.81. Additionally, analysts expect a fully franked dividend of around AU$1.58 per share for FY 2025, which would equate to a dividend yield of approximately 4%. When combined with the expected capital gains, the total potential return for BHP shareholders in the next 12 months could be around 23%.
