BHP Group Ltd (ASX: BHP) is one of the biggest dividend payers in the world.
Every year, the mining giant rewards its shareholders with multi-billion-dollar payouts.
Unsurprisingly, this has made the Big Australian a big favourite with income investors over the years.
In FY 2024, the miner paid out a 72 US cents per share interim dividend and then a 74 US cents per share final dividend, bringing its total payout to 146 US cents per share. Commenting on the dividends, the company said:
Ensuring shareholders continue to benefit from our consistent and reliable performance, we've announced a final dividend of 74 US cents per share. Together with the shareholder dividend for the first half of 72 US cents per share, the total cash dividend to shareholders for FY2024 will be US$7.4 billion, which represents a 54 per cent payout ratio.
Let's just put US$7.4 billion into context for a moment. That's A$11.1 billion in local currency, which is greater than the market capitalisations of blue chip shares Medibank Private Ltd (ASX: MPL), Seek Ltd (ASX: SEK), and Treasury Wine Estates Ltd (ASX: TWE). This demonstrates just how big BHP's dividend payouts really are.
But those dividends have been paid now. So, what's coming up for BHP shareholders or would-be shareholders? Let's find out.
According to a note out of Goldman Sachs, its analysts believe the BHP dividend may have peaked for the time being.
In FY 2025, the broker is forecasting a fully franked US$1.01 per share dividend. This equates to A$1.51 per share at current exchange rates. Based on the current BHP share price of $42.14, this would mean a dividend yield of 3.6%.
An increase is expected by the broker in FY 2026. It is forecasting a fully franked US$1.10 (A$1.65) per share dividend for the 12 months. This represents a 3.9% dividend yield at current prices.
Finally, a slight cut is expected in FY 2027. Goldman believes BHP will pay a US$1.07 (A$1.60) per share dividend for the year. If this proves accurate, it would mean a 3.8% dividend yield.
Goldman is positive on BHP and sees plenty of value in its shares.
It currently has a buy rating and $47.80 price target on them, which implies potential upside of 13.5% for investors over the next 12 months.
Including dividends, this means a total potential 12-month return of approximately 17%.
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