Does BHP (ASX:BHP) really have a 14% dividend yield right now?

Is BHP's dividend too good to be true?

| More on:
A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP

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

Key points

  • BHP has been known as an ASX dividend heavyweight in recent years 
  • The miner announced a record interim dividend last week -- its largest ever
  • Will BHP dividends remain this high in the future? 

Amongst the ASX 200's blue-chip shares, the BHP Group Ltd (ASX: BHP) share price was one to watch over 2021. During the year that was, BHP shares fell by around 2% over the 12-month period. This was despite the fact that the Big Australian's shares rose by 26% between January and the end of July.

But what made BHP worth watching was not the (at times) wild share price performance. It was the dividends that BHP was paying out. The 2021 interim dividend of $1.31 per share was one of the highest BHP has ever paid. And the final dividend of $2.715 per share that investors received on 21 September was a record high.

The total $4.026 per share in dividends that BHP investors enjoyed in 2021 was a massive increase on the already solid $1.75 per share total from 2020.

The 2021 payouts would give BHP shares a trailing dividend yield of 8.36% on the current share price of $48.13.

And yet, BHP has once again upped the stakes.

Last week, the mining giant reported its half-year earnings results. These contained some very pleasant news for income investors. The company announced a record new interim dividend of US$1.50 per share. At today's currency exchange rates, that translates into a payment worth $2.07 per share. That's a new record high for the interim payout.

And with this payout included, BHP's dividend yield now stands at a whopping 9.94%. With BHP's full franking credits, that grosses up to a rather monstrous yield of 14.2%. Even its raw yield is amongst the highest you will see out of almost any ASX 200 blue chip right now.

Is BHP's 14% dividend yield here to stay?

The thing to remember about a company like BHP is that its record-high dividends are built on a foundation of historically high commodity prices. BHP primarily deals with iron ore, coal, oil, and copper. And all of these commodities have seen meaningful price appreciation in recent months, and years in some cases.

But commodities are notoriously cyclical, and if (or when) they do come back to Earth, it might be prudent to expect lower dividend payments from BHP and other companies that mine them. No dividend is ever guaranteed to stay at a consistent level, as is evident from looking through BHP's long dividend history.

But that doesn't mean shareholders can't enjoy the windfall coming their way. The interim BHP dividend will be paid on 28 March.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

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 holding cash which represents dividends.
Dividend Investing

Invested $8,000 in Fortescue shares 5 years ago? Guess how much passive income you've banked!

Fortescue is popular among passive income investors for paying two fully franked dividends per year, even during COVID.

Read more »

Miner looking at a tablet.
Resources Shares

BHP shares are up 9% in a month. Are they still good value?

Is Australia’s largest miner a big opportunity?

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

Did you catch what happened with the big 3 ASX 200 mining stocks in April?

BHP, Rio Tinto, and Fortescue all reported their latest mining results in April.

Read more »

Miner looking at a tablet.
Resources Shares

After its earnings result, what's Macquarie's price target on Fortescue shares?

Let’s dig into what Macquarie thinks of Fortescue after its quarterly update.

Read more »

Two mining workers on a laptop at a mine site.
Resources Shares

The Mineral Resources share price is down 72% in a year. Time to pounce?

Two top experts ran their slide rules over Mineral Resources shares. Here’s what they found.

Read more »

Miner looking at a tablet.
Resources Shares

Mineral Resources share price shoots 15% higher on third-quarter report

The ASX 200 iron ore and lithium giant has released its 3Q FY25 activities report.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why Macquarie says this ASX 200 mining stock could rocket 67% in a year

Macquarie forecasts a big potential rebound for this diversified ASX 200 miner.

Read more »

Female miner smiling at a mine site.
Resources Shares

3 reasons why the Fortescue share price could still be a buy

Here’s why I view Fortescue as an opportunity.

Read more »