BHP Group Ltd (ASX: BHP) shares have long been popular with investors seeking passive income.
The mining giant regularly returns billions of dollars to shareholders through dividends, although the size of those payments can change considerably from year to year.
So, what income could a $100,000 investment produce at the current BHP share price?
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Why income investors like BHP
BHP owns a collection of large mining operations that can generate enormous profits when commodity markets are favourable.
I think its scale is a major attraction. The company can invest in its operations, strengthen its balance sheet, fund new projects, and return surplus money to shareholders.
Dividends have been an important part of that capital allocation.
However, BHP is not the type of company I would expect to pay an identical dividend every year. Earnings are influenced by commodity prices, production volumes, operating costs, exchange rates, and demand from major economies.
That means the income can be generous during strong periods and lower when market conditions become less favourable.
As a result, I think investors need to accept that variability before buying BHP shares primarily for passive income.
What are analysts expecting?
BHP shares are currently trading around $59.15.
According to CommSec consensus estimates, the company is forecast to generate earnings per share of $3.49 in FY26 and $3.61 in FY27.
Those earnings are expected to support fully franked dividends per share of $2.17 in FY26 and $1.93 in FY27.
The forecasts imply dividend payout ratios of approximately 62% and 53%, respectively.
I like that the expected dividends leave some earnings inside the business. BHP still needs money to maintain its operations, develop future production, and protect the balance sheet through weaker commodity cycles.
How much passive income could $100,000 produce?
At $59.15 per share, a $100,000 investment could purchase approximately 1,690 BHP shares before brokerage.
Based on the FY26 dividend forecast of $2.17 per share, those shares could generate around $3,667 of annual passive income.
The forecast FY27 dividend of $1.93 per share would produce approximately $3,262.
That represents forward dividend yields of around 3.7% and 3.3%, respectively.
Both forecasts are fully franked, which could increase the value of the income for eligible Australian investors.
Should I buy BHP shares for passive income?
I think BHP could be a good income investment for someone comfortable with changing dividends.
The forecast dividend yields are not exceptionally high at the current share price. However, investors are also gaining exposure to a financially strong global miner with the ability to return substantial amounts of money when conditions allow.
Foolish takeaway
A $100,000 investment in BHP shares could generate approximately $3,667 in FY26 passive income, falling to around $3,262 in FY27 based on current forecasts.
That may not be enough for investors chasing the highest possible yield, but I think BHP offers more than the next dividend payment.
For investors prepared to accept a variable income stream, the mining giant could still be a strong long-term share to own.
