Why it’s a great day to own BHP shares

Today is a good day to own BHP Group Ltd (ASX: BHP) shares for a couple of reasons.

The first reason is that the mining giant’s shares are on course to end the shortened week in a positive fashion.

At the time of writing, the Big Australian’s shares are up almost 2% to $44.48.

This follows a strong showing for BHP’s US listed shares on the New York Stock Exchange despite a pullback in iron ore prices.

Why else is it a great day to own BHP shares?

The other reason it is a great day to have BHP shares in your portfolio is that today is pay day for shareholders.

Last month, BHP released its half-year results and reported a 6% increase in revenue to US$27.2 billion and flat underlying earnings of US$6.6 billion for the half.

This allowed the miner to declare an interim dividend of 72 US cents (A$1.10) per share, which represents a total payout of US$3.6 billion and a payout ratio of 56%.

Today is the day that the Big Australian is paying eligible shareholders this dividend, much to their delight.

Especially given that at yesterday’s close price, this interim dividend equates to a very attractive 2.5% dividend yield.

What’s next for the BHP dividend?

According to a note out of Goldman Sachs, its analysts expect a similar dividend to be paid for the second half of FY 2024.

The broker has pencilled in a fully franked final dividend of 73 US cents (111.7 Australian cents) per share. This will mean another 2.5% dividend yield for shareholders.

Looking further ahead, Goldman expects the BHP dividend to come in at US$1.28 (A$1.96) per share in FY 2025 and US$1.25 (A$1.91) per share in FY 2026. Based on where BHP shares currently trade, this will mean yields of 4.5% and 4.4%, respectively.

The post Why it’s a great day to own BHP shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Down 14% in 2024, why is the BHP share price sliding again today?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• Shares vs. property: How to generate $500 passive income per month
• Here’s how the ASX 200 market sectors stacked up last week

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 positions in and has recommended Goldman Sachs Group. 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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