BHP (ASX:BHP) dividend record, shares slide regardless

The company is returning a record amount of capital to investors.

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The BHP Group Ltd (ASX: BHP) share price is having a morning to forget on Wednesday. That's after the company released its full-year results after market close yesterday and also confirmed the merger of its oil and gas assets with Woodside Petroleum Limited (ASX: WPL). As part of the results announcement, BHP declared a full-year dividend of US $3.01 per share, fully franked.

At the time of writing, shares in the mining behemoth are trading for $48.44 – down 5.63%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is practically flat.

Let's take a closer look at BHP's dividend news.

BHP dividend boost

For financial year 20/21, BHP declared a net profit of US $17.1 billion. That's an 88% leap on the prior corresponding period (pcp). Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped a nice 69% to US $37.4 billion. Net operating cash flow increased 73% to US $27.2 billion.

As a result, the company announced a final dividend of US $2.00 per share, fully franked. Added to the interim dividend paid of US $1.01 per share, that equates to a full-year dividend of US $3.01 per share ($4.15 AUD). At the current BHP share price, this equates to a dividend yield of 8.57%.

In FY20, BHP paid a full-year dividend of $1.75 AUD, fully franked – a 4.4% yield at the time.

Today's dividend announcement is a record for BHP shareholders and the yield is much greater than usual.

BHP share price snapshot

Over the past 12 months, the BHP share price has increased by 21.9%. It is slightly underperforming the ASX 200 by 0.8 percentage points. This excludes any dividend payments. Year to date, the company's shares have climbed by almost 13%

At the current share price, BHP Group has a market capitalisation of around $151 billion.

Motley Fool contributor Marc Sidarous 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 Bruce Jackson.

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