The BHP Group Ltd (ASX: BHP) share price is down today, but there is one key reason for that.
BHP is one of the largest miners in the world, producing huge amounts of iron ore, as well as copper and coal.
BHP shares go ex-dividend
After each result, such as the FY24 report, the mining company declares a dividend for shareholders.
At a certain point, there is a cutoff date for when shareholders will gain entitlement to the dividend and non-holders miss out, even if they buy shortly after the cutoff date and before the dividend is paid. This is called the ex-dividend date.
For BHP shares, the ex-dividend date is today. That means that any investor buying shares today will miss out on the upcoming dividend payment of US$0.74 per share. Owning shares yesterday meant an investor would be entitled to this dividend.
The dividend is fully franked for Australian investors, which provides extra tax benefits.
BHP will pay its dividend in different currencies, including in Australian dollars for Aussies. At the current exchange rate, in Australian dollar terms, the payout would be A$1.11 per share.
What else is going on today?
The iron ore market has been thrown another curve ball by the Brazilian miner Vale which is now expecting to produce more iron ore in 2024 than it was previously expecting.
According to reporting by Mining.com, Vale announced on Wednesday that it’s expecting to produce between 323 million tonnes and 330 million tonnes of iron ore in 2024, an increase from its prior forecast of 310 million tonnes to 320 million tonnes.
More iron ore in the global system could push down the iron ore price further.
Final thoughts on the BHP share price
Since the beginning of 2024, the BHP share price has fallen 23.5%. That’s a huge decline for one of Australia’s biggest businesses.
I wouldn’t buy BHP shares just because it has gone ex-dividend, but I would say the valuation could be appealing because the iron ore price is only likely to fall so far before other miners cut production to save costs. BHP could be a contrarian opportunity, I also like the company’s exposure to copper. I would be willing to buy some shares today and buy more if it dropped further.
But, there are other ASX dividend shares out there I have more confidence in to deliver long-term growth of both earnings and dividends.
