BHP Group Ltd (ASX: BHP) shares are a popular choice among passive income-seeking investors.
It's not hard to see why. The blue-chip major is currently the largest stock on the ASX by market capitalisation, and it has a consistently strong operational performance.
BHP is a cyclical, rather than a defensive stock. While cyclical stocks are closely tied to the broad economic cycle, they usually outperform during periods of economic recovery. And this is great news for income-focused investors.
The miner's strong operational history and diversified commodity exposure also means it has a long history of paying consistent and reliable fully-franked dividends to its shareholders.
But how much passive income could a $10,000 investment actually generate?
Let's investigate.
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What's the latest out of BHP shares?
At the time of writing, BHP shares are down about 1% and trading at $60.14. The shares are now up around 31% year-to-date and 48% higher than a year ago.
How many shares can I buy for $10,000?
At the current share price of $60.14, a $10,000 investment would buy about 166 shares.
What dividend does BHP pay its shareholders?
First, we need to understand what dividends the mining giant pays its shareholders.
BHP traditionally pays two fully franked dividends to shareholders each year, in March and September.
BHP declared a total fully franked FY26 dividend of US$1.72 per share (equivalent to $2.4184) last month. This includes a US$0.73 interim and a US$0.99 final dividend.
Based on the current share price, that translates to a dividend yield of around 4%.
For FY27, BHP is expected to pay US$1.93 (AU$2.70) to shareholders in FY27. At the time of writing, that implies a forward dividend yield of around 4.5%.
So, what passive income can I earn off my $10,000 investment?
Using the estimated payout figures above, we can calculate roughly how much income you can expect from a $10,000 investment.
If the mining giant were to pay the expected $2.70 per share in FY27, then your 166 BHP shares would generate a total of $448.20 in passive income.
What do brokers tip next for BHP shares?
BHP shares have enjoyed an incredible rally over the past 12 months off the back of stronger commodity prices and the company's strong operational performance.
But it looks like the shares are now trading around fair value.
Market Index data shows the majority of brokers have a hold rating on BHP shares. The average $61.78 target price implies a potential 3% upside ahead, at the time of writing.
TradingView data shows similar sentiment. The majority of analysts (13 out of 21) have a hold rating on BHP shares. Another five rate the mining stock as a strong buy, and three rate the shares as a sell/strong sell.
The average $61.09 target price now implies a potential 2% upside over the next 12 months, at the time of writing.
However, the range between the maximum and minimum target prices is wide. Some forecast the shares to fall nearly 30% to $42.92. Meanwhile, others are bullish that BHP shares could climb another 12% higher to $67.50 over the next 12 months, at the time of writing.
