The BHP Group Ltd (ASX: BHP) share price is edging higher on Monday afternoon.
At the time of writing, the mining giant's shares are up 0.5% to $37.90.
While this is positive on a red day for the ASX 200, the BHP share price is still down a disappointing 30% from its August high of $54.55.
Is the BHP share price good value?
While the recent weakness in the BHP share price is disappointing for shareholders, it could be a buying opportunity for non-shareholders.
That's the view of the team at Macquarie Group Ltd (ASX: MQG), which last week retained their outperform rating and $56.00 price target on the miner's shares.
Based on the current BHP share price, this implies potential upside of 48% over the next 12 months.
And that's before dividends. Macquarie is forecasting a fully franked dividend of $3.97 per share in FY 2022. This works out to be a sizeable 10.5% dividend yield, which increases the total potential return to over 58%.
Why is Macquarie so bullish?
Macquarie is bullish on BHP largely due to the diversity of its operations.
Although the iron ore price has fallen heavily in recent months, this is being cushioned by strong rises in other commodity prices such as coal.
"Buoyant coking coal prices have enabled BHP to maintain earnings upgrade momentum despite the recent volatility in iron-ore prices," it commented.
In fact, the broker believes that overall commodity prices are strong enough for BHP to generate enough free cash flow to support a ~20 free cash flow yield. Which, as mentioned above, is expected to underpin very generous dividends in the near term.
In light of this, the broker appears to believe that the recent weakness in the BHP share price could be a buying opportunity for investors looking for exposure to the resources sector.
