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.
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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.
