BHP Group Ltd (ASX: BHP) shares are a very popular option for passive income investors.
It isn't hard to see why this is the case.
Twice a year, the mining giant rewards its shareholders with fully franked dividends.
And, depending on the mining cycle, this can mean several billions of dollars heading into the pockets of Aussie investors.
But what would I need to do if I wanted to generate $1,000 of passive income from BHP shares? Let's run the numbers.
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Passive income from BHP shares
To begin with, let's see what analysts are expecting the Big Australian to pay to shareholders in the near term.
The consensus estimate is for fully franked dividends of approximately $2.05 per share in FY 2026 and then $1.80 per share in FY 2027.
However, it is worth noting that BHP's interim dividend for FY 2026 has now been paid. As a result, the next two dividends will be its final dividend for the current financial year and the interim dividend for the next one.
Based on that, we will assume that BHP shares provide a dividend of 192.5 cents per share over the next 12 months.
This means that to generate $1,000 in passive income, I would need to buy a total of 519 BHP shares.
How much will that cost?
At the time of writing, BHP shares are changing hands for $49.96.
This means that to buy the 519 shares I need for $1,000 of passive income, I would need to invest $25,929.24.
That's certainly not a small amount. But it could be worth it.
Not only would I be getting a nice paycheck every six months, but there is potential for capital returns too.
BHP shares tipped to rise
According to the note out of Morgan Stanley this month, its analysts have put an overweight rating and $56.00 price target on the mining giant's shares.
Based on its current share price, this implies potential upside of 12% for investors over the next 12 months.
This means that if Morgan Stanley's recommendation is on the money, those 519 BHP shares would be worth $29,064 in a year. That's over $3,100 more than I started with and doesn't include the $1,000 of passive income.
So, in total, a return of approximately $4,100 could be possible from an investment of just under $26,000.
