Despite a sharp selloff after its results announcement, BHP will be paying a record dividend.
The post What you need to know about the BHP (ASX:BHP) dividend dates in 2021 appeared first on The Motley Fool Australia. –
After starting the day firmly in the red, shares in the iron ore major were down 6.1% at $48.20 by early afternoon on Wednesday. This is despite BHP announcing a seemingly positive result, headlined by a merger deal with Woodside Petroleum Limited (ASX: WPL) and an 88% surge in underlying attributable profit to US$17,077 million.
The BHP dividend was another positive piece of news, with a record fully franked final dividend of US$2.00 per share. This lifts the company’s full-year dividend to US$3.01 per share, up 151% year-on-year.
About the BHP dividend
BHP has opted to pay a final dividend of US$2.00 per share, which translates to A$2.76 at current exchange rates.
At today’s prices, this final dividend represents a yield of approximately 5.67%.
In addition, the dividend represents a historically high payout ratio of 92% of net profit.
To add some perspective, BHP’s payout ratio has been 85%, 72% and 73% across 1H FY21, FY20 and 1H FY20 results respectively.
Dividend dates you need to know
The BHP share price will go ex-dividend on Thursday, 2 September and the payment date on Tuesday, 21 September.
What to expect when BHP goes ex-dividend
As reported by The Australian, Morgans financial analyst Adrian Prendergast said that “the share prices of the big iron ore miners are likely to come under pressure as they trade ex-dividend”.
This has already been evidenced by Rio Tinto Ltd (ASX: RIO) which tumbled 6.88% to $120.26 after its shares went ex-dividend on 12 August.
The Rio Tinto share price has since fallen another 4.22% since its ex-dividend date to a 4-month low of $115.27 at the time of writing.
“We still view the value downside vs. big dividend return as a trade-off that on a total return basis is skewed to the downside for the big iron ore miners,” Prendergast was quoted as saying.
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Motley Fool contributor Kerry Sun 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.