Why the BHP (ASX:BHP) share price just hit a new all-time high this Friday

BHP shares have just hot a new record high…

| More on:
A mining worker wearing a hard hat, orange high vis vest and blue long-sleeved shirt raises his fists in celebration with an excited expression on his face

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) is having a pretty ho-hum kind of day this Friday. The ASX 200 is currently down, but only just, falling 0.049% to 7,414 points at the time of writing. But one of its major constituents – the BHP Group Ltd (ASX: BHP) share price – is doing a bit better today.

BHP shares have just hit a new all-time high. The 'Big Australian' is currently up a healthy 1.65% to $54.21 a share, after hitting $54.55 earlier today. That's a new record high for the miner. But it's not the first time BHP has climbed to new heights in recent times.

BHP shares have spent 2021 so far on fire. This ASX 200 blue chip is now up 26% year to date in 2021 so far, and a very impressive 43.5% over the past 12 months. It's also up 171% over the past 5 years. These numbers don't reflect BHP's substantial dividend payments either.

So what is pushing BHP up once again this Friday?

Why the BHP share price is hitting new record highs today

Well, there's no major news or announcements out of the miner today, so we can rule that out straight away. However, several factors have been 'coming up Milhouse' for BHP in recent months.

The first is the stubbornly high iron ore price. Iron ore is currently going for US$193 a tonne. That's not quite as high as the US$200 a tonne-plus levels we have seen for most of 2021 so far. But it is still extremely elevated by historical levels, meaning that iron ore miners are still gushing cash flows.

These high iron prices are also being supplemented by the Aussie dollar, which has spent the last few months or so falling in value against the US dollar. Back in early May, one Aussie dollar was buying around 79 US cents. Today, that same dollar will only get you around 74 US cents.

Since BHP sends most of its iron ore overseas (where buyers purchase it in US dollars), this means BHP is getting more Australian dollars than it did a few months ago for every tonne it sells.

All of this adds up to investors smelling money. BHP's rival Rio Tinto Limited (ASX: RIO) announced a record US$9.1 billion upcoming dividend on Wednesday, worth US$5.61 ($7.59) a share. There is probably a reasonable expectation that BHP will be pulling something similar out of its hat, given both companies are sitting in similar tailwinds.

It's likely a combination of these factors that are pushing up BHP shares today to new record highs. At the current BHP share price, the company has a market capitalisation of $157.1 billion, a price-to-earnings (P/E) ratio of 29.07, and a trailing dividend yield of 3.81%.

Motley Fool contributor Sebastian Bowen 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

Should I buy Pilbara Minerals or Mineral Resources shares? Here's Macquarie's take

Mineral Resources and Pilbara Minerals shares are both down more than 60% in a year, but Macquarie forecasts a big…

Read more »

Miner looking at a tablet.
Resources Shares

Does Macquarie rate Fortescue shares a buy, hold or sell?

Down 42% in a year, does Macquarie think Fortescue shares are now a good buy?

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Resources Shares

Rock solid: How have mining and metals shares fared in 2025?

Who is leading so far?

Read more »

Miner looking at a tablet.
Resources Shares

Mineral Resources share price slides despite significant reserves growth

An 89% resources upgrade hasn’t boosted Mineral Resources shares today.

Read more »

Copal miner standing in front of coal.
Resources Shares

How much upside does Macquarie tip for New Hope shares?

A softer-than-expected quarter has impacted the broker's view.

Read more »

2 people at mining site, bhp share price, mining shares
Resources Shares

Rio Tinto share price pushes higher on $1.4 billion lithium agreement

Rio Tinto shares are gaining major lithium exposure.

Read more »

Miner looking at a tablet.
Resources Shares

Up 73% since April, why Mineral Resources shares could keep charging higher

A leading expert says that Mineral Resources shares remain ‘heavily undervalued’. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »