Here’s the BHP dividend forecast through to 2024

BHP’s dividends could be very juicy in the coming years…

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A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall

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The BHP Group Ltd (ASX: BHP) share price has taken a tumble this month amid weakness in commodity prices.

This has particularly been the case with the iron ore price, which has pulled back meaningfully following softer downstream demand in China and recession fears.

In light of this recent share price weakness, investors may be wondering what this means for dividends in the coming years. So, let’s take a look at what analysts are saying about the Big Australian’s dividend.

Where is the BHP dividend heading?

According to a note out of Goldman Sachs this week, its analysts are expecting BHP to reward shareholders with some big dividends in the coming years.

As a starting point, in FY 2021, BHP rewarded shareholders by more than doubling its fully franked dividend to US$3.01 per share.

Goldman Sachs expects this to be increased again in FY 2022. It is forecasting a US$3.50 per share fully franked dividend. Based on the current BHP share price of $39.77 and current exchange rates, this suggests a dividend yield of 12.7%.

And while the broker is expecting easing coal and iron ore price to weigh on its profits and dividends in FY 2023, it still believes BHP will pay another big dividend.

It is forecasting a US$2.65 per share dividend for FY 2023, which represents a yield of 9.6%.

Finally, in FY 2024, Goldman Sachs is expecting coal and iron prices to ease further. As a result, it is forecasting a fully franked US$2.01 per share dividend to be paid to shareholders. This would still mean a very attractive yield of 7.3%.

Decent upside predicted for the BHP share price

Goldman isn’t just expecting the BHP dividend to provide attractive returns. It also sees plenty of value in the BHP share price.

The broker has a buy rating and $49.40 price target on the mining giant’s shares.

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 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 Scott Phillips.

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