UPDATE: Analysts at Macquarie have just released critical forecasts for BHP Group Ltd’s dividends through 2029, signaling important changes for income-focused investors. This urgent news comes as BHP, a stalwart in the mining sector, prepares to adjust its dividend payouts in response to fluctuating commodity prices.
BHP has been a favorite among income investors due to its consistent and generous dividends, with a fully franked payout of US$1.10 per share in FY 2025, supported by robust underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of US$25,978 million. However, recent forecasts indicate a shift in the dividend landscape.
According to Macquarie, FY 2026 will see a slight dip in dividends, projected at US$1.05 per share, down from the previous year. This translates to a yield of approximately 3.7%, driven by a minor decline in underlying EBITDA to US$24,948 million. Investors should note that this decline is linked to modestly softer commodity prices.
Looking ahead to FY 2027, Macquarie anticipates a further reduction in dividends to US$1.01 per share, with EBITDA declining to US$22,370 million. This equates to a yield of around 3.5%, which, while lower than recent highs, remains appealing compared to many other ASX blue chips.
The forecast for FY 2028 offers a glimmer of hope, with dividends expected to recover slightly to US$1.03 per share. This aligns with a rebound in EBITDA to US$22,618 million, translating to a yield of roughly 3.6%.
In a more promising turn, FY 2029 is projected to bring a significant increase in both earnings and dividends. Macquarie estimates a fully franked dividend of US$1.18 per share, fueled by an expected EBITDA lift to US$24,941 million. This forecasted payout would yield about 4.1%, not including the added benefit of franking credits, marking the highest payout since FY 2025.
For investors considering BHP shares, Macquarie currently advises caution, recommending a wait for a more favorable entry point. The broker has set a neutral rating with a price target of US$43.00, slightly below current levels.
As these developments unfold, potential investors should stay tuned for further updates on BHP’s performance and market conditions that could impact dividend payouts. The implications of these forecasts extend beyond immediate financial returns, affecting the broader investment landscape as commodity prices continue to evolve.
In summary, BHP’s dividend trajectory through 2029 reveals a complex interplay of market forces, making it essential for investors to stay informed and ready to act as conditions change.
