The BHP Group Ltd (ASX: BHP) share price will be on watch on Wednesday.
This is because today is the final day for non-shareholders to get hold of the mining giant’s US$1.02 ($1.43) per share fully franked special dividend which is part of a capital return programme following the divestment of its shale oil assets.
BHP’s shares will trade ex-dividend tomorrow, meaning investors will need to be on the share registry by the end of the trading day if they want to be paid the 4.15% dividend on January 30.
Should you buy shares?
I think BHP is a great option for income investors right now and it is well worth picking up shares in time for the special dividend pay out.
Because of the company’s portfolio of world class and low cost operations, I believe BHP is in a great position to deliver another year of bumper free cash flows in FY 2019 despite the slowing of China’s economic growth.
Considering how strong the miner’s balance sheet is right now, this could mean that further capital returns are possible in 2019.
I’m not the only one that thinks that BHP’s shares are in the buy zone.
A note out of the Macquarie Group Ltd (ASX: MQG) equities desk yesterday revealed that it has an outperform rating and $40.00 price target on its shares.
This price target implies potential upside of over 16% for BHP’s shares over the next 12 months, excluding dividends. Including dividend stretches the potential return to over 20%.
The broker has suggested the stimulus package being put together by the Chinese government could have a positive impact on mining shares.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.