BHP Group Ltd (ASX: BHP) shares have long been a favourite among ASX passive income investors due to the miner's reliable, twice-yearly fully franked dividends.
2021 and 2022 were particularly rewarding for passive income investors holding BHP shares.
With iron ore, copper and coal prices running high over much of that time, the S&P/ASX 200 Index (ASX: XJO) iron ore miner paid a record final dividend in 2021 and a record interim dividend in 2022.
Now, with the iron ore price having fallen from some US$220 per tonne in mid-2021 to trade for US$95 per tonne on Friday, BHP's dividends have come off the boil since then.
Though at Friday's closing price of $39.60 a share, BHP stock still trades on a fully franked trailing yield of 5.5%.
So, with this picture in mind, just how much passive income would you have earned buying $8,000 worth of BHP shares in early 2021?
Drilling into BHP shares for passive income
Spurred by the soaring iron ore price, the BHP share price charged higher in the first half of 2021.
If you'd timed it right, 29 January 2021 would have been an opportune time to buy the ASX 200 mining stock for passive income, with shares closing out the day at $43.56.
That means your $8,000 investment would have netted you 183 BHP shares, with enough change left over for a large pizza.
At Friday's closing price of $39.60, those same shares would be worth $7,246.8 today.
From a capital gains perspective, then, you'd have lost $753.2, or 9.4% of your initial investment.
So, how about that passive income?
If you'd held onto your BHP shares since January 2021, you'd have been eligible to receive the past eight dividend payments.
Well, you'd actually have banked seven of them by now. BHP will pay its final FY 2024 dividend of $1.092 a share on 3 October. The ASX 200 mining stock traded ex-dividend this past Thursday, 12 September.
Tallying up those past eight dividend payouts, you'd have received (or shortly would have) $13.462 per share in fully franked dividends.
Or $2,463.55 in passive income from the 183 BHP shares you bought in January 2021.
Now, let's add that back into the $7,246.8 that those shares were worth at Friday's close.
This brings the accumulated value of your 183 BHP shares purchased for $8,000 to $9,710.35. Or a gain of 21%, with potential tax benefit from those franking credits.
Once again, this demonstrates the huge difference passive income can make to your long-term returns when investing in high-yielding ASX dividend stocks.
