I'd need this many BHP shares for passive income of $10,000 a year

Is this mining giant a good option for income investors? Let's find out.

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Miner holding cash which represents dividends.

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BHP Group Ltd (ASX: BHP) shares are traditionally a popular option for passive income investors.

And it isn't hard to see why.

The mining giant regularly shares a large portion of its profits with its shareholders through the distribution of both an interim and final dividend.

This has seen the Big Australian cumulatively return tens of billions of dollars to investors over the past few years.

The good news for investors looking for a passive income boost is that the next BHP dividend is only days away from being announced. On Tuesday 20 February, the miner will be releasing its half year results and declaring its interim dividend for FY 2024.

$10,000 a year of passive income from BHP shares

If you want to generate $10,000 of income from BHP shares, then you would need to make a reasonably large investment. Though, analysts believe it could be well worth doing.

According to a note out of Goldman Sachs, its analysts are expecting the miner to pay a fully franked US$1.49 per share (A$2.28 per share) dividend in FY 2024. Based on the current BHP share price of $45.61, this equates to an attractive 5% yield for investors.

This means that you would need to own 4,386 BHP shares to pull in passive income of $10,000. That's an investment of approximately $200,000.

But as I said above, it could be worth the investment.

As well as getting $10,000 of income from its BHP dividends, Goldman expects your shares to increase in value meaningfully.

It has a buy rating and $49.40 price target on them. If they were to rise to this level, they would have a market value of almost $217,000.

Throw in the passive income and you're looking at a ~$27,000 return on your investment. Not bad if you ask me!

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 positions in and has recommended Goldman Sachs Group. 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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