Among the popular Australian stocks, BHP Group Limited (AU:BHP) shines on the ASX index with its dividend yield of 5.6% surpassing the industry average of 1.9%. BHP Group has maintained a stable dividend payment record since 1984, making it a reliable choice for income investors.
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Over the last few weeks, BHP stock has made headlines for its attempts to acquire UK-based mining company Anglo American PLC (GB:AAL). However, last month, the company abandoned its takeover plans after both parties could not reach an agreement, leading to satisfaction among BHP’s investors.
BHP is a multinational, diversified mining company, producing various commodities such as iron ore, coal, copper, and more.
More on BHP’s Dividend
In February, BHP announced a fully franked interim dividend of $0.72 (AU$1.09) per share for the six months ending December 31, 2023. Despite a 20% decrease from the previous year, it was above the consensus forecast of $0.69 per share. The dividend was paid on March 28, 2024, to shareholders registered before March 7.
According to Goldman Sachs, the company is expected to pay a dividend of $1.42 per share in FY24 and $1.26 per share in FY25.
Is BHP Currently a Good Buy?
Overall, BHP’s earnings largely depend on commodity prices, especially iron ore and copper. However, the company is strategically positioning itself to align with the transition toward sustainable and greener technologies, emphasizing the critical role of copper in this shift.
While iron ore prices have exhibited volatility, leading to some uncertainty, copper offers a more stable outlook due to its vital role in renewable energy and electric vehicles.
In terms of capital appreciation outlook, analysts are moderately bullish on the stock and predict a modest upside of 2%. Nonetheless, analysts from Citi and Goldman Sachs see much higher growth potential.
Earlier this month, analyst Paul Young from Goldman Sachs confirmed a Buy rating on the stock, suggesting an upside of almost 15%. Young is bullish on the stock, considering the huge opportunity related to the $20 billion copper pipeline and the strong production growth anticipated between 2024 and 2025.
Similarly, Citi analyst Paul McTaggart reiterated a Buy rating with a forecast of a 14% upside.
What is the forecast for BHP stock?
According to TipRanks’ rating consensus, BHP stock has received a Moderate Buy rating based on 16 recommendations. The BHP share price target is AU$43.61, which is 2.14% above the current price level.
