If I buy BHP shares now, what could my return be in a year's time?

Will the Big Australian be a market beater over the next 12 months?

BHP Group Ltd (ASX: BHP) shares are starting the week positively.

In morning trade, the mining giant's shares are up almost 2% to $45.85.

This means the BHP share price is now up almost 15% over the last six months.

A female worker in a hard hat smiles in an oil field.

Image source: Getty Images

What if you bought BHP shares now?

While anyone buying BHP shares six months ago will be no doubt patting themselves on the back, would you be doing the same if you bought shares today?

Well, the good news is that one leading broker believes there's plenty of returns ahead for anyone buying at current levels.

According to a recent note out of Macquarie, its analysts have an outperform rating and $53.00 price target on the Big Australian's shares.

Based on the current BHP share price, this implies potential upside of almost 16% for investors between now and this time next year.

Don't forget the dividends

But the returns won't stop there! Far from it! As you will be aware, BHP is one of the biggest dividend payers in the world.

Pleasingly for shareholders (or prospective shareholders), Macquarie is expecting a generous fully franked dividend yield from its shares this year and next.

The broker has pencilled in a fully franked $3.40 per share dividend in FY 2023. It is also expecting another dividend broadly in line with this in FY 2024.

Based on where BHP shares are currently trading, this will mean a fully franked 7.4% dividend yield.

If we add this to the potential capital returns, this suggests a total return of approximately 23% for investors over the next 12 months.

To put this into context, a $10,000 investment in BHP shares could turn into $12,300 in a year's time if Macquarie is on the money with its recommendation.

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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