BHP Group Ltd (ASX: BHP) shares are a popular option for passive income investors and it isn't hard to see why.
Twice a year, the mining giant rewards its shareholders with a dividend. This has seen tens of billions of dollars paid out in recent years.
This continued during the first half of FY 2025 with the Big Australian once again declaring a dividend that is larger than the market capitalisation of some ASX 200 shares.
Commenting on its performance and dividend, BHP's CEO, Mike Henry, said:
BHP reported a strong financial performance for the half-year, underpinned by safe and reliable operations and rigorous cost control. The Group's industry-leading margins and robust cash flow enabled the Board to determine an interim dividend of 50 US cents per share – a total of US$2.5 billion.
The strength of the result demonstrates BHP's operational resilience and its ability to perform through the cycle, with standout production performances in the half from Escondida, WAIO and BMA. WAIO has maintained its lead as the lowest-cost iron ore producer globally, a testament to our ongoing work to drive productivity at our operations.
In Australian dollars that dividend totals $3.97 billion. This is more than the value of AMP Ltd (ASX: AMP), Flight Centre Travel Group Ltd (ASX: FLT), and Brickworks Ltd (ASX: BKW), to name just three.
Clearly this is big money. But how much would you need to invest to receive a $1,000 slice of this as passive income? Let's find out.
$1,000 passive income from BHP shares
According to a note out of Goldman Sachs, its analysts are expecting BHP to pay fully franked dividends of 102 US cents (162 Australian cents) per share in FY 2025 and then 112 US cents (178 Australian cents) per share in FY 2026.
This means that you would need to own a total of 617 BHP shares to pull in passive income of $1,000 over the next 12 months.
On Friday, the BHP share price ended the week at $38.65. As a result, you would need to invest a total of $23,847.05 into the miner's shares to generate the target level of income.
That's quite a lot, but it certainly could be worthwhile. Goldman Sachs believes the market is undervaluing the Big Australian's shares and has put a buy rating and $47.30 price target on them.
If its share price were to rise to this level, it would value those 617 units at $29,184.10. That's more than $5,300 greater than the original investment and doesn't include the forecast passive income. Not bad!
