BHP Group vs Rio Tinto shares: Which pays better dividends?

BHP Group vs Rio Tinto shares: Which is better for passive income investors today?

If you’re searching for steady dividends and long-term portfolio strength, two giants often come into focus: BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). Both are titans in global mining with reputations for pumping out franked cashflows to shareholders, and their scale makes them regulars in most Aussie blue-chip portfolios. But when it comes to passive income—reliable, chunky dividend streams—how do the shares stack up for investors today? Here’s my breakdown comparing BHP Group vs Rio Tinto shares, with a focus on the numbers that matter most for income seekers.

The case for BHP Group

BHP Group is a world-spanning mining powerhouse, headquartered in Melbourne and known for steelmaking ingredients like iron ore and copper, as well as coal, nickel, and potash. Following a restructure in 2022, it now sports a primary ASX listing, keeping things simpler for local shareholders. BHP’s earnings and share price can swing with commodity cycles, but it’s famed for its size, diversification, and disciplined capital returns.

A few key takeaways:

• Market cap: At $310.39 billion, BHP dwarfs most local peers and brings both scale and global reach.
• Dividend yield: Currently 3.96%, and crucially, with full 100% franking—the kind of income profile many Australian retirees crave.
• Dividend consistency: BHP’s dividend history shows regular twice-yearly payments, typically fully franked, with occasional special dividends sprinkled in.
• YTD return: The shares have surged 39.5% year to date, indicating strong momentum, likely helped by resource price moves.

According to its company profile, BHP boasts a formidable global footprint with operations reaching from Australia to South America and across various high-demand commodities.

The case for Rio Tinto

Rio Tinto is another Australian mining icon, originally founded in 1873 and now one of the largest metals and mining corporations worldwide. Its core businesses are iron ore, aluminium and lithium, and copper—products right at the heart of global electrification and decarbonisation trends. Like BHP, it benefits from scale and commodity diversification.

Here’s what stands out:

• Market cap: Rio Tinto’s value sits at $62.28 billion—substantial, though well below BHP’s heft.
• Dividend yield: Also at 3.96%, and like BHP, fully franked, which is a major plus for Aussie income investors.
• Dividend per share: $6.63, higher than BHP’s $2.42 per share (though both have different share prices and outstanding shares, so yield is what counts).
• Earnings per share: At $7.382, Rio has a higher reported EPS than BHP, reflecting mining cycles and possibly a leaner capital base.
• YTD return: Shares are up 18.6% in the year to date—a strong but more modest lift compared to BHP.

Rio Tinto’s latest business description highlights a focus on growth areas like lithium and copper, putting it front and centre for big trends like electric vehicles, even as iron ore remains its engine room.

Valuation comparison

For passive income investors, yield and valuation are top-of-mind. Let’s look at direct fundamentals:

A few nuances: Rio Tinto’s lower P/E ratio could suggest it’s trading on more cautious earnings expectations, relative to BHP. Both offer identical dividend yields (and franking), but Rio’s higher dividend per share simply reflects its higher share price, not greater yield.

Note: BHP’s reported P/E ratio and EPS combination suggests its P/E is calculated using a different earnings measure than the simple EPS figure, which is why they may appear inconsistent. The same logic applies to Rio Tinto.

Recent share price performance

Comparing the past month (21 August to 18 September 2026):

• BHP Group: Rose from $65.16 (21 Aug) to $61.05 (18 Sep), a decline of about 6.3% over the period, despite a strong YTD gain of 39.5%.
• Rio Tinto: Rose from $175.38 (21 Aug) to $167.49 (18 Sep), also down approximately 4.5% over the same period, with a YTD gain of 18.6%.
• Both showed volatility typical of diversified miners, driven by swings in commodity prices and broader market mood.
• These prices are as at September 18, 2026, and may have shifted since.

Which is the better buy?

With income in mind, here’s how I see it: Both BHP Group and Rio Tinto currently offer a healthy 3.96% fully franked dividend yield, which will put a smile on most passive income seekers’ faces. BHP is by far the bigger beast, with a greater global reach and a much fatter market cap, but size alone doesn’t make BHP the better buy for dividend collectors.

The most meaningful real difference right now is in valuation and share price performance. BHP’s shares have smashed out a bigger YTD gain (39.5% versus Rio’s 18.6%), suggesting a stronger run of late and perhaps higher investor confidence. But that means BHP now trades on a higher P/E (22.4 vs. 16.08), so Rio looks the more “value-priced” choice for those worried about buying in at a peak.

Each company has a well-established record of fully franked dividends and a diversified mining footprint. In this context, with yields identical and both offering franking, I’d lean toward Rio Tinto as my passive income pick today: it’s trading on a lower price-to-earnings multiple, offers the same headline yield, and has a strong track record. If BHP’s valuation pulled back or its dividend yield moved ahead, I’d reconsider—but for now, Rio’s combination of income and sensible valuation wins the day for me.

The post BHP Group vs Rio Tinto shares: Which pays better dividends? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.