Is it Worth Buying BHP Stock with $2.30 Dividend per Share?

BHP Group Ltd (ASX: BHP), commonly referred to as the "Big Australian," has long been recognized as one of the premier dividend-paying stocks on the Australian share market. With a history of consistently delivering substantial dividends to its shareholders, BHP has remained a popular choice among income-oriented investors.


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Analyzing BHP's Dividend Prospects

For investors eyeing BHP as an ASX dividend stock, gauging its dividend prospects for FY 2024 and 2025 is key. Analysts predict fully franked dividends of $2.30 per share in FY 2024 and $2.31 per share in FY 2025, translating to robust yields of 5.05% and 5.1% respectively.

Analysts' Perspectives on BHP Stock

While BHP's dividend yields are enticing, investors also seek insights from analysts regarding the attractiveness of the stock as a whole. Despite recent gains in the BHP share price, analysts see potential for further upside, albeit with some caution.


Morgans, for instance, maintains an "add" rating on BHP stock with a price target of $48.30, implying a potential upside of 6%. When factoring in dividends, the total return could exceed 11%. Similarly, Citi analysts rate BHP as a "buy" with a $48.00 price target, suggesting a potential upside of 5.5%. Including dividends, the total potential return could surpass 10%.


Goldman Sachs, while expressing a preference for rival Rio Tinto Ltd (ASX: RIO), retains a "buy" rating on BHP stock with a $49.00 price target. This implies an almost 8% upside for investors, with total potential returns reaching nearly 13% when considering fully franked dividends.

Factors Driving Analysts' Recommendations

Goldman Sachs underscores BHP's attractive valuation relative to its peers, noting its ongoing superior margins and operating performance, particularly in the Pilbara iron ore sector. Despite trading at a premium compared to Rio Tinto, BHP's robust financials and strategic investments contribute to its appeal.


BHP's increased minerals capex and focus on high-returning copper growth further bolster its investment case, positioning it as a top choice for investors seeking exposure to the resources sector.


In conclusion, while analysts acknowledge the competitive landscape and potential headwinds, they remain bullish on BHP's long-term prospects, emphasizing its solid fundamentals, attractive dividend yields, and strategic initiatives.
Location: Australia

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