BHP shareholders have something to look forward to today…
The post The final BHP (ASX:BHP) dividend will be paid to shareholders today. Here’s what to expect appeared first on The Motley Fool Australia. –
The BHP Group Ltd (ASX: BHP) dividend will be finally landing into shareholder accounts today. This comes at an opportune time as investors would have seen their wealth fall significantly in the past few weeks.
At the time of writing, BHP shares are fetching for $37.34, down 0.51%. A far cry from when the world’s second largest mining company’s shares were touching record highs of $54.55.
What’s happened to BHP shares recently?
The plunging spot price of iron ore has had a detrimental effect on the miner’s shares.
In May, the steel-making ingredient reached an all-time high of US$229.50 per tonne. BHP shares accelerated on the back of bumper revenues over the period.
However, a slowdown in Chinese demand amid political pressure has led iron ore prices to tumble in recent months. As Australia’s rift grows with China, policymakers in the Asian giant introduced new rules for its steel producers. This is seen as an effort to curb reliance on Australian iron ore and boost domestic supply and demand.
Chinese mills were instructed to limit 2021 output to no more than 2020 levels, or face harsh consequences.
Deep cuts have been made over the months of July and August, 8% and 12% respectively. Further reductions are expected for the remainder of 2021, as current iron ore levels are up 5% year-to-date compared to 2020.
At the most recent price, iron ore is trading around US117.01 per tonne, falling another 4.87% overnight.
What about the BHP dividend?
After reporting a robust full-year result, the board declared a record fully-franked final dividend of US$2 (A$2.7152) per share. This brings the full-year dividend to US$3.01 when factoring in the interim dividend, up 151% year-on-year.
While investor holdings in the company will be down for the moment, the BHP dividend has come at an opportune time. Depending on what eligible shareholders opted for, the dividend could be paid to shareholders today or reinvested back into the company for more BHP shares.
In hindsight, for every 100 BHP shares owned, you can expect to receive roughly $271.52 (100 shares x $2.7152). However, if you elected to be in the dividend reinvestment plan (DRP), you will be receiving 7 new BHP shares ($271.52 / $37.34 (current BHP share price)).
BHP share price snapshot
It has been a rollercoaster ride for BHP investors, with its shares reaching an all-time high in August.
Over the last 12 months, the company’s share price is flat, with year-to-date down by more than 10%.
BHP commands a market capitalisation of roughly $110.7 billion and has approximately 2.95 billion shares on its registry.
Should you invest $1,000 in BHP right now?
Before you consider BHP, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and BHP wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Bruce Jackson.