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BHP vs Coles shares
If you're eyeing ASX shares for reliable passive income, you've probably pondered BHP and Coles. Both pay fully franked dividends and are ASX heavyweights, yet they hail from very different sectors and show some striking contrasts. Here's how they stack up for dividend-focused portfolios.
The case for BHP
BHP is Australia's mining giant, exporting iron ore, copper, coal, and other resources worldwide. It's a true blue-chip, not just in size but in its role as a key supplier in global commodity markets. The company's fortunes are tied closely to demand and pricing for industrial metals—so while the share price can swing with the cycle, BHP has a long track record of strong profits and rewarding shareholders along the way.
Some highlights from the data:
- Market cap: $308.71 billion, dwarfing most other ASX names
- Dividend yield: 3.98%, fully franked, which is tasty for income hunters
- P/E ratio: 22.11
- Dividend history: BHP's record shows not only continuous payments, but regularly climbing payouts for over a decade—including some bumper years and special dividends
- 2026 full-year dividends: Interim $1.04 and final $1.38, both 100% franked
- YTD return: 38.8%, showing robust momentum in the current year
There's some volatility given its sector, but the strength of BHP's dividends (together with generous franking) has long been a drawcard for passive income.
The case for Coles
Coles is about as "core Aussie" as it gets—a household name in supermarkets, liquor, and retail staples. Spun off from Wesfarmers in 2018, Coles now operates a national store network and is seen as an anchor stock for defensive income portfolios.
Here's what pops in the numbers:
- Market cap: $31.15 billion—a fraction of BHP's, but still a major ASX player
- Dividend yield: 3.36%, fully franked, with a pattern of reliable semi-annual payouts
- P/E ratio: 28.56, higher than BHP's, perhaps reflecting sector defensiveness
- Recent dividend history: Consistent fully franked dividends (final 2026: $0.37, interim: $0.41) and a stable payout trajectory since relisting post-2018
- YTD return: 11.8%—steady, if not spectacular, reflecting the market's regard for Coles as a "safe haven" in uncertain times
For investors prioritising reliability over big yield swings, Coles is an attractive option, offering predictable income from the supermarket aisles to your portfolio.
Valuation comparison
Here's how the major passive income metrics line up:
| BHP | Coles | |
|---|---|---|
| Market Cap | $308.71 billion | $31.15 billion |
| P/E Ratio | 22.11 | 28.56 |
| Dividend Yield | 3.98% (100% franked) | 3.36% (100% franked) |
| Dividend per Share (most recent year) | $2.42 | $0.74 |
Both offer fully franked dividends, but BHP edges ahead on yield. Coles commands a higher P/E ratio, which may reflect the supermarket sector's perceived stability and lower earnings volatility.
Recent share price performance
Comparing recent share price activity up to 25 September 2026:
- BHP closed at $60.72, down 0.5% for the day. The stock is up 38.8% year to date, suggesting robust performance for 2026.
- Coles closed at $23.19, up 1.3% for the day. Year-to-date, Coles shares have delivered an 11.8% return, reflecting more modest but steady progress.
Which is the better buy?
If I'm aiming for passive income, my pick would be BHP. Its higher yield (3.98% vs 3.36%) sets the pace here, supported by a long history of fully franked, sometimes generous, payouts and recent share price momentum. Volatility is a risk with any mining stock and commodity cycles can knock earnings around, but the dividend stream has stayed robust even through some tough years.
Coles offers stability and predictability, backed by defensive, non-cyclical earnings. But for genuine income-seeking investors, the slightly lower yield and less adventurous growth means it struggles to match BHP's overall proposition on the numbers supplied.
Of course, if I was after absolute rock-solid steadiness and could accept a somewhat lower yield, Coles would still sit very comfortably in my core portfolio. But for now, I'd lean toward BHP as the income choice—with the bonus of some capital gain upside in a strong year.
