It's a good day to be an owner of BHP Group Ltd (ASX: BHP) shares.
That's because today is the day that the BHP dividend is being paid to eligible shareholders.
Image source: Getty Images
The BHP dividend
Last month, the Big Australian released its half-year results and, as was widely expected, posted a decline in revenue.
For the six months ended 31 December, BHP reported a 16% reduction in revenue to US$25,713 million. This reflects lower average realised prices for iron ore, copper, and hard coking coal, which was partially offset by higher prices for weak coking coal, thermal coal, and nickel.
It was a similar story for its earnings, with BHP posting a 28% decline in underlying EBITDA to US$13,230 million. This was driven by a combination of weaker commodity prices and inflationary pressures.
In light of this profit decline, the BHP board unsurprisingly elected to cut its interim dividend.
BHP declared an interim dividend of 90 US cents per share, which was down from US$1.50 per share a year earlier. Nevertheless, this still equates to a massive return of US$4.6 billion and is the equivalent to a 69% payout ratio.
Eligible shareholders can now look forward to receiving BHP's interim dividend, which equates to A$1.36 in local currency, in their nominated bank accounts today.
What's next for its dividends?
Thanks to recent strength in iron ore prices, Goldman Sachs is expecting the BHP final dividend to be larger.
It has pencilled in a fully franked final dividend of US$1.21 per share. This brings its full-year dividend to US$2.11 per share.
This equates to A$3.16 in local currency and is the equivalent of a generous fully franked 7% yield based on the current BHP share price of $45.00.
