If youâre an income investor, then you will no doubt have considered the BHP Group Ltd (ASX: BHP) dividend at some point.
After all, the mining behemoth is one of the worldâs biggest dividend payers. Each year, it returns billions of dollars of its profits back to its shareholders, lining their pockets with cash and boosting their passive income.
However, it is fair to say that some investors have an aversion to investing in the mining sector. This is due to finding it difficult to predict mining cycles and the unpredictability of earnings.
While this is understandable if youâre wanting a consistent and predictable level of passive income each year, you could still be doing yourself a disservice by missing out on some big dividend yields that are being offered by BHP shares.
BHP dividend forecast
For example, Goldman Sachs is predicting that the BHP dividend will be large enough to provide above-average yields this year and next.
According to a recent note, its analysts expect the Big Australian to be in a position to pay fully franked dividends per share of US$2.05 in FY 2023 and then US$1.63 in FY 2024. This currently equates to A$3.08 per share and A$2.45 per share at current exchange rates.
Based on the current BHP share price of $44.08, this will mean yield of 7% and 5.6%, respectively, for income investors. Both yields are well ahead of the traditional market average dividend yield of 4%.
In addition to the generous BHP dividend yield, Goldman also sees scope for sizeable capital returns.
The brokerâs buy rating and $49.90 price target implies potential upside of 13.2% for investors over the next 12 months. This stretches the total potential return to approximately 20%.
The post Why the BHP dividend forecast has caught my attention! appeared first on The Motley Fool Australia.
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More reading
- This fund manager thinks the BHP share price could reach $100!
- Could the iron ore price slide below $100 US dollars in 2023?
- How to invest $10,000 in ASX dividend shares in May
- Why are ASX 200 mining stocks having such a shocking end to the week?
- What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
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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