Every year, the Big Australian pays big dividends to its lucky shareholders.
And while the amount the miner returns to them will change depending on how strong or weak commodity prices are in a particular year, when times are good, BHP has been known to share tens of billions of dollars with its shareholders.
But that was the past, what about now? What might I receive in passive income if I were to invest $10,000 into BHP's shares now?
How much passive income will BHP shares generate?
Firstly, if we were to invest $10,000 into the miner's shares at the current share price of $45.68, we would end up with 219 units.
A recent note out of Goldman Sachs reveals that its analysts are forecasting fully franked dividends per share of US$1.19 in FY 2024. This equates to $1.84 per share in Australian dollars.
And while this is down 30% from FY 2023's dividend of US$1.70 per share, it still represents an attractive 4% dividend yield.
In respect to passive income, this $1.84 per share dividend would yield $402.96 in dividends for us over the next 12 months.
But one thing that is worth noting is that Goldman Sachs' estimates are based on an average iron ore price of US$94 per tonne in 2024. So, with the current spot iron ore price fetching US$120 per tonne, there's clearly scope for stronger-than-expected earnings and bigger-than-forecast dividends if the price of the steel-making ingredient stays strong.
Another important thing to note is that Goldman's estimate is lower than what other analysts are expecting.
For example, Morgans is forecasting a fully franked dividend of ~A$2.66 per share in FY 2024. This would generate a passive income of $582.54 from our $10,000 investment.
In addition, with an add rating and price target of $51.00 on BHP's shares, Morgans thinks that our 219 units could be worth $11,169.
So, that'll be passive income of $582.54 and capital gains of $1,169. Not bad if you ask me!