S&P/ASX 200 Index (ASX: XJO) dividend shares can provide investors with a very useful passive income stream.
Some investors might choose to reinvest those dividends and let the magic of compounding help grow their wealth over time.
Others might choose to tap into that passive income after it lands in their bank account to fund some extra purchases or leisure activities.
Whatever you might wish to do with the dividend payments from ASX shares, I'd lean towards those companies paying fully franked dividends. That way, you're credited with the 30% in corporate taxes the company has already paid on its profits.
With that said, here's an ASX 200 dividend stock that paid $2.614 per share in fully franked dividends over the past 12 months.
Or $2,614 in annual passive income from 1,000 shares.
Tapping this ASX 200 dividend share for passive income
The leading ASX 200 dividend share in question is BHP Group Ltd (ASX: BHP).
Atop its attractive dividend payments, shares in the ASX 200 iron ore miner are up 19% over the past 12 months.
As for that passive income, BHP's last two dividends were down year on year along with falling commodity prices.
At its recently announced financial year results (FY23), the miner reported a 17% year-on-year decline in revenue, to US$53.8 billion. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at US$28 billion, down 31% from FY22.
Still, the board determined dividends totalling US$8.6 billion to shareholders for the year. That sees the total amount in cash dividends for the past three years at more than US$40 billion
In FY23, BHP rewarded shareholders with an interim dividend of $1.364 per share. That was paid on 30 March.
The final dividend of $1.25 per share will be paid on 28 September. If you'd like to snag that passive income, you'll need to own shares in the ASX 200 miner at market close next Wednesday, 6 September. The stock trades ex-dividend on Thursday.
At the current BHP share price of $44.73, the ASX 200 miner trades at a yield (partly trailing, partly pending) of 5.8%.
And with those franking credits, investors may be able to hold onto more of that passive income at tax time.
