ASX-listed BHP Group Limited (AU:BHP) boasts a dividend yield of 5.9%, significantly higher than the sector average of 1.88%, positioning it among the top income picks in the Australian stocks. The stock is set to go ex-dividend this week, presenting an opportunity to become eligible for the upcoming dividend payout.
In terms of capital appreciation outlook, analysts are cautious and have rated the stock as a Hold. Year-to-date, BHP stock has declined by 12.5%.
BHP is a multinational mining corporation engaged in the production of various commodities such as iron ore, coal, copper, and more.
BHP’s Upcoming Dividend
Last month, NHP declared a fully franked interim dividend of $0.72 per share for the six months that ended on December 31, 2023. Although this marks a 20% decrease compared to the previous year, it was still ahead of the consensus forecast of $0.69 per share.
This dividend will be paid on March 28, 2024, to shareholders registered before March 7.
What Led to the Drop in Dividends?
The decline in BHP’s dividends was primarily attributed to fluctuations in global commodity prices and weaker-than-anticipated demand, which impacted the financial performance of the company.
Last month, BHP unveiled its half-year results for FY24, revealing a 6% uptick in revenue to $27.2 billion. However, profit after tax declined 86% year-over-year to $927 million. The market largely anticipated the decline, as BHP had previously announced one-time charges worth $5.64 billion, including impairment of nickel assets and additional costs linked to the Samarco dam failure.
Yet, the company maintains a robust balance sheet, boasting a free cash flow of $3.8 billion, marking a 9% increase from the corresponding period of FY23.
Is BHP Group a Good Stock to Buy Now?
According to TipRanks’ rating consensus, BHP stock has received a total of 14 recommendations, of which 10 are Hold. It also includes three Buy and one Sell ratings. The BHP share price target is AU$47.3, which is 7% above the current price level.
