BHP Group Ltd (ASX: BHP) stock features heavily in income portfolios across the country.
And it isn't hard to understand why.
With the mining giant paying out billions of dollars in dividends each year, you can usually count on a generous dividend yield from its shares.
But is that the case today? Let's find out.
Is BHP stock a buy now for ASX dividend investors?
A number of brokers see a lot of value in BHP stock at current levels.
For example, Macquarie has an outperform rating and a $48.00 price target on the Big Australian's shares at present. This suggests potential upside of almost 10% for investors over the next 12 months.
In addition, importantly for income investors, the broker is expecting above-average dividend yields from the miner in the near term.
It has pencilled in fully franked dividends per share of approximately $2.13 in FY 2024 and $2.58 in FY 2025. Based on the latest BHP share price of $43.86, this would mean yields of 4.85% and 5.9%, respectively.
Is anyone else bullish?
Macquarie isn't alone with its bullish view on BHP stock.
Goldman Sachs has a buy rating and a $49.40 price target on its shares, which suggests an even greater potential upside of 12.5% from current levels.
As for income, the broker has pencilled in fully franked dividends of approximately $2.19 per share in FY 2024 and then $1.93 per share in FY 2025. This will mean attractive yields of 5% and 4.4%, respectively, for income investors.
Commenting on the Big Australia, Goldman Sachs said:
We are Buy rated on: (1) Attractive valuation, but at a premium to RIO; (2) GS bullish copper and met coal; (3) Optionality with +US$20bn copper pipeline and improved production growth; (4) Robust FCF, but still below RIO. We continue to believe that BHP's major opportunity is growing copper production in Chile at Escondida and Spence, and growing copper production and capturing synergies in South Australia between Olympic Dam and the previous OZL assets.
