How much could $10,000 invested in BHP shares be worth next year?

Here's what analysts think could happen to an investment in the Big Australian.

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BHP Group Ltd (ASX: BHP) shares have been under pressure in recent weeks.

Investors have been hitting the sell button in response to falling iron ore prices. This has led to the miner's shares falling approximately 13% since the start of the year.

The question now, though, is whether this has created a buying opportunity for investors?

To find out, let's see what a $10,000 investment in BHP's shares could turn into in a year if you were to buy at today's share price.

Investing $10,000 into BHP shares

Firstly, with the Big Australian's shares currently fetching $44.15, you could pick up 227 units with an investment of $10,022.05.

What could these shares be worth in 12 months?

Well, a recent note out of Goldman Sachs reveals that its analysts have put a buy rating and $49.40 price target on the miner's shares.

The broker highlighted four reasons why it thinks BHP shares are a buy at current levels.

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.

Big return potential

If the mining giant's shares were to rise to Goldman's price target, your 227 units would have a market value of $11,213.80. That's a return of over $1,200 on your original investment.

But the returns won't stop there. While it is too late to get hold of BHP's recently declared interim dividend, over the next 12 months the miner will be paying out its final dividend of FY 2024 and its interim dividend of FY 2025.

Goldman is expecting dividend yields of 5% in FY 2024 and 4.4% in FY 2025. This should mean a yield of approximately 4.7% for investors between now and this time next year, which would mean dividend income of approximately $470 on your investment.

If this proves accurate, this boosts the total potential return on investment to approximately $11,680 or 16.5%.

All in all, this arguably makes BHP worth considering if you're looking for exposure to the mining sector today.

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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