If I invest $10,000 in BHP shares, how much passive income will I receive in 2024?

Should you buy BHP shares for a passive income boost next year?

| More on:
Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.

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

BHP Group Ltd (ASX: BHP) shares have historically been a firm favourite of passive income investors.

It isn't hard to see why. The Big Australian generates huge profits from its world-class operations across the globe and returns a large portion of this cash to shareholders each year.

This saw the mining giant return US$13.3 billion to shareholders in the form of dividends in FY 2023.

The good news is that iron ore prices have been stronger than expected this year, which means that FY 2024 could be a good year for passive income. But how much would a $10,000 investment in BHP shares generate? Let's take a look.

Passive income from BHP shares

Firstly, if we were to invest $10,000 in BHP shares, we would end up with 215 units.

Moving on, according to a note out of Goldman Sachs last week, the broker is now expecting the miner to pay fully franked dividends of 142 US cents per share in FY 2024. Based on current exchange rates, this equates to a $2.20 per share dividend.

If this proves accurate, it will mean an attractive 4.7% dividend yield for investors. And importantly, it will also mean a passive income of approximately $475 from our $10,000 investment.

But the returns won't necessarily stop there. Goldman currently has a buy rating and a $49.90 price target on the company's shares.

If they were to rise to that level our investment would grow to be worth $10,728.50 before dividends. Throw in our passive income and the total return is approximately $1,200.

That is a solid 12% annual return for us, which is comfortably ahead of the market average return over the last 30 years of 9.6%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Materials Shares

CSR share price rising asx share price represented my man in hard hat giving thumbs up
Materials Shares

Rio Tinto share price in focus on US$4.8b half year profit and dividend cut

Let's see how the mining giant performed during the first half.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Materials Shares

Is now a good time to buy Liontown shares?

Let's see what Bell Potter is saying about this lithium miner.

Read more »

Worker in hard hat looks puzzled with one hand on chin
Materials Shares

Guess which ASX 200 mining stock is crashing 12% on Wednesday

This miner is being sold off today. But why? Let's find out.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Pilbara Minerals shares race higher on big news

Let's see why this lithium giant is getting a lot of attention today.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

Forget BHP shares, this ASX mining stock could surge 18% higher

Let's see why this mining stock could be a buy according to analysts at Bell Potter.

Read more »

Worker looking at cement being poured out.
Materials Shares

How much upside does Macquarie tip for James Hardie shares?

While the broker is positive on the stock, some concerns remain.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Liontown shares sink on tough quarter

This lithium miner is failing to roar on Tuesday. But why?

Read more »

Three miners looking at a tablet.
Materials Shares

Up 19% in a month: Top broker gives its verdict on the Fortescue share price

Is it too late to buy this mining giant's shares?

Read more »