BHP Group Ltd (ASX: BHP) shares have never been a straight-line story.
The mining giant's share price has gained nearly 200% over the past decade, but that journey has included plenty of ups and downs. That's the nature of a business tied to commodity cycles. Even so, the past 12 months alone have seen BHP shares climb roughly 47%.
To put it in perspective, the S&P/ASX 200 Index (ASX: XJO) has risen 68% over ten years and 11% over the past 12 months.
So why consider buying now and holding through to 2036?
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Strong operations across key commodities
Despite volatile commodity prices, BHP's core operations continue to deliver.
The company has reported record production from its Western Australian iron ore operations and solid output from its copper division. Iron ore remains on track to meet full-year guidance, while copper production is expected to land in the upper half of its range.
That consistency matters. When multiple divisions are performing well at the same time, it supports earnings stability and strong cash generation.
There's also a bigger picture at play. Global demand for key resources – especially copper – is expected to grow as the world transitions toward cleaner energy. Copper is essential for electric vehicles, renewable energy systems, and power infrastructure.
If that trend plays out, BHP shares are well positioned to benefit.
Reliable income with strong dividend history
BHP shares aren't just about growth, it's also a major income stock.
The company has a long track record of paying dividends, with distributions stretching back nearly two decades. It typically targets a payout ratio of at least 50% of earnings, which means shareholders benefit directly when commodity prices are strong.
Yields often sit in the 4% to 6% range and are usually fully franked, making them particularly attractive for Australian investors.
Of course, dividends can fluctuate with earnings. But over time, BHP has proven it can deliver meaningful income across cycles.
Financial strength and long-term growth
Another key reason to watch BHP shares is the company's balance sheet and future pipeline.
The company has strengthened its financial position through asset sales and strategic deals, including a major silver streaming transaction. These moves have generated significant cash and reinforced an already robust balance sheet.
That financial flexibility is critical. It allows BHP to invest in new projects while still returning capital to shareholders.
One standout project is the Jansen potash development in Canada, with first production expected around mid-2027. This adds exposure to a completely different commodity – fertilisers – providing diversification beyond iron ore and copper.
At the same time, BHP continues to focus on low-cost operations and disciplined capital allocation. That approach helps protect margins, even when industry costs rise.
Foolish Takeaway
BHP shares will always be influenced by commodity cycles – that's unavoidable. But with strong operations, reliable dividends, and exposure to long-term demand trends, the company offers a compelling case for patient investors.
For those willing to ride out the ups and downs, BHP could remain a powerful long-term holding well into the next decade.
