BHP Group Ltd (ASX: BHP) has long been one of the most popular ASX dividend shares with income investors.
That is not hard to understand. The Big Australian is one of the world's largest mining companies, has exposure to major commodities such as iron ore and copper, and has rewarded shareholders with some very large dividends over the years.
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The BHP dividend
The BHP dividend can move around more than those of many defensive income shares.
This is because its earnings are heavily influenced by commodity prices, exchange rates, operating costs, and global demand conditions.
But that has not stopped investors from being drawn to the stock. When times are good, BHP can generate enormous cash flows. And because its dividends are usually fully franked, they can be particularly attractive to Australian investors seeking income.
So, how big could the BHP dividend be in 2027?
BHP dividend forecasts
Based on current consensus forecasts, BHP is expected to pay fully franked dividends of $1.91 per share in FY 2026.
After that, the market is expecting the mining giant to pay a slightly lower dividend of $1.80 per share in FY 2027.
This means that, based on the latest BHP share price of $59.75, investors would be looking at a forward fully franked dividend yield of approximately 3% for FY 2027.
Looking a little further ahead, the market is then forecasting a dividend of $1.95 per share in FY 2028. That would represent a fully franked dividend yield of approximately 3.3%.
These dividend yields are not as high as some income investors may have seen from BHP in recent times, but that's because its shares have been very strong performers and recently reached a record high.
In addition, investors should remember that these are only forecasts. If iron ore or copper prices move materially, BHP's earnings and dividends could look quite different by the time FY 2027 arrives.
Should you buy BHP shares?
BHP remains a high-quality mining giant with world-class assets and exposure to long-term demand themes, particularly through copper and the minerals needed for electrification and infrastructure.
However, after a strong run in its share price, many analysts appear to believe the stock is broadly fair value at current levels.
Morgan Stanley is more positive. Earlier this month, the broker put an overweight rating and $67.50 price target on BHP shares.
That implies potential upside of approximately 13% from where BHP ended the week.
