How much must I invest in BHP shares to earn a $1,000 passive income in 2027?

What would it take to make $1,000 of passive income in 2027?

BHP Group Ltd (ASX: BHP) shares have delivered a significant return in the last 12 months, rising by more than 50%, at the time of writing. The passive income has also been pleasing for investors.

As one of the biggest miners in the world, BHP enjoys significant scale benefits compared to many of its other smaller mining peers. BHP also has a habit of providing investors with pleasing payouts because of its commitment to returns.

BHP aims to provide shareholders with a minimum dividend payout ratio of at least 50% of earnings, which regularly results in a pleasing dividend yield.

Now that the FY26 result has been reported, investors can look ahead to what the payout might be in FY27. I'll specifically look at what it would take to deliver $1,000 of passive income via BHP shares.

Hand with Australian dollar notes handing the money to another hand symbolising ex-dividend date.

Image source: Getty Images

Payout projection for FY27

ASX mining shares are not like typical businesses where you may typically see steady progress and earnings year after year.

Miners like BHP are exposed to shifting commodity prices, which can be great when the resource price goes up but challenging if the resource price goes down. Commodity businesses can have powerful operating leverage that can work both positively and negatively.

The 2026 financial year was a good year. Revenue grew 15% to US$58.8 billion, underlying operating profit (EBITDA) rose 27% to US$32.9 billion and underlying attributable profit increased 30% to US$13.2 billion. This allowed the business to announce US$8.7 billion of cash returns to shareholders, which included the FY26 final dividend per share of US 99 cents per share.

The current forecast on Commsec implies the dividend in FY27 may not be as rewarding, though still solid. The current projection suggests a payout of A$2.07 per BHP share.

That possible dividend translates into a potential grossed-up dividend yield of around 4.5%, including franking credits, at the time of writing. It's understandable why the possible dividend yield is not below 5% because the BHP share price has gone up so much in the last 12 months.

I believe the company's payouts could grow in the longer-term because of its increasing focus on copper. Copper supply may not be able to keep up with the rising demand, which may lead to a rising copper price.

In the FY26 result, BHP wrote:

Copper fundamentals remain attractive. Demand is expected to grow from ~34 Mtpa today to >50 Mtpa by CY50, driven by traditional economic growth (home building, electrical equipment and household appliances), energy transition (renewables and electric vehicles) and digital (artificial intelligence and data centres). Current expectations are that copper demand associated with investment in data centres could grow around sixfold between 2024 and 2050, up to around 3 Mtpa.

Operational and project development challenges will place upward pressure on industry costs, potentially resulting in a higher and steeper copper cost curve.

What would it take for $1,000 of passive income?

If the FY27 projection comes true, an investor may need to own 484 BHP shares excluding the franking credits or 339 BHP shares with franking credits attached. This certainly isn't a cheap BHP share price to invest at following the large rise of the ASX mining share. It may be worthwhile looking at other opportunities that could be better value.

Motley Fool contributor Tristan Harrison 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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