If I invest $10,000 into BHP shares, how much passive income will I receive?

Will the Big Australian continue to pay big dividends?

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BHP Group Ltd (ASX: BHP) shares have come under pressure this month due to a pullback in the iron ore price.

So much so, the mining giant's shares are down almost 17% from the 52-week high they reached at the very end of December.

While this is disappointing for shareholders, it could be a buying opportunity for the rest of us.

This is particularly the case for passive income investors given that this weakness has boosted the potential dividend yield on offer with its shares.

Generating passive income from BHP shares

As a reminder, BHP released its half-year results last month and reported a 6% increase in revenue to US$27.2 billion and flat underlying earnings of US$6.6 billion.

This allowed the BHP board to declare a fully franked interim dividend of 72 US cents per share (A$1.10 per share) for the period.

Unfortunately, the company's shares have already traded ex-dividend for this payout. As a result, the rights to the dividend are now settled and buying BHP's shares won't lead to you receiving it on pay day on 28 March.

But never fear, there are plenty more dividends to come to earn passive income from. So, what would $10,000 earn investors?

Firstly, if I were to invest $10,000 (and an additional $8.76) into the Big Australian, I would end up owning 236 shares.

According to a note out of Citi from last week, its analysts are forecasting a $2.55 per share dividend in FY 2024. This will mean a fully franked final dividend of approximately $1.45 per share.

From that dividend alone, my 236 shares would produce passive income of $342.20.

Looking ahead, Citi then expects a 3.5% increase in the BHP dividend to $2.64 per share in FY 2025. If this proves accurate, my 236 shares would generate income of $623.04.

In total, that's $965.24 of passive income from my $10,000 investment.

Don't forget the gains

It is also worth noting that Citi upgraded BHP's shares to a buy rating with a $46.00 price target last week.

If the BHP share price were to rise to that level, my 236 shares would have a market value of $10,856.

That means a total return on investment of $1,821.24 could be on the cards between now and the payment of BHP's final dividend of FY 2025.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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