BHP shares are at a record high, should I buy or sell?

A record high can make a share feel expensive, but I would not be rushing to sell BHP shares today.

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BHP Group Ltd (ASX: BHP) shares have been on a huge run.

The mining giant hit a record high of $65.78 on Wednesday, which means the share price is now up approximately 75% over the past 12 months.

After a move like that, it is natural to ask whether the opportunity has passed. A record high can make a share feel expensive, especially when investors remember buying opportunities at much lower prices.

But I would not be rushing to sell BHP shares. In fact, I still think they are a buy for long-term investors.

A woman with a mobile phone in her hand looks sceptical with a puzzled expression on her face.

Image source: Getty Images

The valuation is not extreme

The first point I would make is that BHP does not look wildly expensive on current forecasts.

Using CommSec consensus estimates, the company is expected to generate earnings per share of around $4.46 in FY26 and $4.48 in FY27.

At the record high price of $65.78, that puts BHP on a price-to-earnings (P/E) ratio of about 14.7 times FY26 and FY27 earnings.

That is not a bargain-bin valuation, but I do not think it is excessive either, particularly if commodity prices remain stronger for longer.

The dividend also remains useful. CommSec estimates fully-franked dividends per share of $2.12 in FY26 and $2.02 in FY27. That implies forward dividend yields of around 3.2% and 3.1%, respectively.

A supportive commodity backdrop

The bigger reason I would remain positive is the potential commodity backdrop.

Bell Potter has argued that a new resources supercycle may be forming. The broker believes several megatrends are now colliding with a resource base that has been underinvested in for years, creating the potential for "new and higher price floors" across a range of commodities.

That is an important point for BHP. The last major resources boom was driven heavily by China's industrialisation and urbanisation. That created enormous demand for bulk commodities such as iron ore, coal, and oil.

The next cycle could look different.

Bell Potter points to AI capital expenditure, global electrification, and deglobalisation as major structural forces. Those trends are more intensive in materials such as copper, aluminium, uranium, lithium, nickel, and rare earths.

BHP is not exposed to all of those commodities equally, but it is very well placed in copper. I think that is a major reason to keep owning the stock.

Copper is central to electrification, power grids, data centres, renewable energy, and broader industrial demand. At the same time, supply is difficult to bring on quickly. Large copper projects can take many years, face permitting hurdles, and require substantial capital.

If demand keeps rising and supply remains constrained, higher prices could be more durable than the market expects.

Why I would still buy

BHP is still a cyclical business. Commodity prices can fall, China remains important, costs can rise, and investor sentiment toward miners can change quickly.

But I think the current setup is more compelling than a simple "share price has gone up, therefore sell" argument.

BHP has scale, world-class assets, strong cash generation, and exposure to commodities that could become even more valuable if the global economy keeps investing in electrification, AI infrastructure, and energy security.

The company may not rise another 75% over the next year. I would not invest on that assumption. But I think the long-term case remains strong, especially if Bell Potter is right that this is the early stage of a more structural commodity cycle.

Foolish Takeaway

I would not sell BHP shares just because they have reached a record high.

The share price has moved strongly, but the valuation still looks reasonable on consensus forecasts, the dividend yield remains respectable, and the company has exposure to commodities that could benefit from powerful long-term demand trends.

There will be volatility along the way. That comes with owning miners. But for investors with a long-term view, I think BHP remains one of the best ASX 200 resource shares to buy and hold.

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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