BHP Group (ASX: BHP) shares failed to follow the broader market rebound on Thursday and instead declined, but this might actually be good news for shareholders.
As of the time of writing, the mining giant’s share price fell 1.5% to A$41.66, underperforming against the ASX 200’s 0.6% gain for the day. However, the decline was not due to negative business updates, weaker iron ore prices, or a broker downgrade. Rather, the shares traded ex-dividend on that day in line with the upcoming final dividend for fiscal year 2025. When a company’s shares trade ex-dividend, it means the right to the dividend payment has been determined. New investors purchasing the shares will not receive the upcoming dividend; instead, the dividend will be paid to the seller who held the shares on the record date. Since the dividend constitutes part of the company’s value, the share price typically adjusts downward accordingly after going ex-dividend, reflecting this allocated portion of value.
Last month, BHP reported its fiscal year 2025 results and announced a fully franked final dividend of 60 cents per share. Although this represents a significant decrease compared to the previous year, the total cash distribution still amounts to US$3 billion (approximately A$4.5 billion). This sum is even sufficient to acquire listed companies such as Bank of Queensland (ASX: BOQ) or Lovisa Holdings (ASX: LOV). Based on BHP’s previous closing price of A$42.29 and the current exchange rate, this dividend offers a relatively attractive yield of approximately 2.1% for investors. This means an investor holding A$20,000 worth of BHP shares would receive about A$420 in final dividend income on the payment date.
Eligible shareholders are expected to receive this final dividend later this month, on September 25. Opinions are divided on whether investors should buy the dip following the recent share price decline. Currently, most brokerages consider the shares to be fairly valued. However, the team at Morgan Stanley holds a more optimistic view, assigning an “overweight” rating with a target price of A$46.50.
