Why is the BHP share price bolting out of the gates on Tuesday?

The BHP Group Ltd (ASX: BHP) share price has been a solid performer on Tuesday.

In morning trade, the mining giant’s shares are up 2% to $40.85.

Why is the BHP share price rising today?

Investors have been buying BHP shares today despite there being no news out of the mining giant.

However, it is worth noting that the materials sector is the best-performing sector on the Australian share market today after the iron ore price rose overnight.

According to CommSec, iron ore futures rose by US$1.73 or 1.8% to US$97.35 a tonne.

This has seen fellow miners Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) also push higher this morning.

Anything else?

Something else that could be supporting the BHP share price today was a note out of Goldman Sachs.

Its analysts have been looking at the mining sector and have given their verdict on a range of shares, including the Big Australian.

According to the note, the broker has retained its buy rating with an improved price target of $43.50. Based on the current BHP share price, this implies potential upside of 6.5% for investors over the next 12 months.

Goldman is also expecting a 6% dividend yield over the next 12 months, which stretches the total potential return to over 12%.

Its analysts commented:

BHP to continue trading at a premium to global mining peers (~0.5x premium to global mining peers over 10-yrs) which we believe can be maintained. […] BHP is trading on an attractive FCF/DPS yield of c. 5%/6% over the next 12-m.

All in all, this could make BHP shares one to consider if you’re looking for options in the materials sector right now.

The post Why is the BHP share price bolting out of the gates on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for ASX dividend shares for the rest of 2022?
• Why did BHP shares avoid Monday’s sell-off?
• Leading brokers name 3 ASX shares to buy today
• Could this spell trouble for the BHP share price?
• Morgans names the ASX 200 mining shares to buy and sell

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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