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%.
