When it comes to blue-chip ASX dividend shares, few names are as prominent as BHP Group Ltd (ASX: BHP).
As the world's largest mining company, BHP's portfolio stretches across iron ore, copper, nickel, coal, and potash, making it a global heavyweight in resources.
Its scale and diversity have long made it a core holding for many Australian investors. This is especially true for income investors.
That's because it is one of the most consistent dividend payers on the ASX. Thanks to its ability to generate massive cash flows from its world class operations, the Big Australian regularly returns billions of dollars to shareholders via fully franked dividends. This has cemented its reputation as a cornerstone stock for those seeking both stability and income.
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The BHP dividend
Mining is cyclical, with earnings tied to the ups and downs of commodity markets. But BHP has proven that it can navigate those cycles while still rewarding shareholders.
Its strong balance sheet, diversified operations, and disciplined capital allocation mean it is well placed to deliver dividends even in tougher times.
And while its dividends are currently at the low end of the cycle, that doesn't mean it isn't worth considering.
For example, Morgan Stanley expects BHP to pay a fully franked dividend of $1.75 per share in FY 2026. It then expects the miner to pay out $1.66 per share the following year.
$10,000 invested in BHP shares
BHP shares ended the week at $42.22. This means that a $10,000 investment would allow you to pick up approximately 237 shares when the market opens on Monday.
And it could be worth it. Morgan Stanley currently has an overweight rating on the stock with a price target of $46.50. This implies potential upside of around 10% from current levels and would give those shares a market value of $11,020.50.
What about passive income?
Based on Morgan Stanley's forecasts, those 237 BHP shares would generate approximately $415 in passive income in 2026. That doesn't include the added benefit of franking credits, which can boost after-tax returns for many investors.
And the income stream doesn't stop there. Looking further ahead, Morgan Stanley's forecasts imply further income of $393 the following year.
Foolish takeaway
Investing $10,000 into BHP shares today could generate around $415 in passive income in FY 2026, with more to follow in subsequent years.
Add in potential share price appreciation and the total return picture looks appealing for long-term investors.
