Investors focused on dividends may be having a look at BHP (ASX: BHP). Is BHP the best dividend stock?
What is BHP?
is a world-leading resources company, extracting and processing minerals (like iron ore and copper), oil and gas, and has more than 62,000 employees and contractors, primarily in Australia and the Americas. Headquartered in Melbourne, BHP has shares listed on both the ASX and London Stock Exchange (BHP Billiton Plc).
Is it the best dividend share?
There are plenty of blue chips out there known for dividends like CBA (ASX: CBA), Woodside Petroleum (ASX: WPL) and others which may have a dividend cut coming soon because of the COVID-19 impacts..
BHP on the other hand, its earnings and dividend are linked to commodity prices and demand from places like China. The iron ore price has held up strongly, though oil prices have plummeted due to OPEC and Russia not being able to come to an agreement. I’d guess they will agree something sooner rather than later.
For ASX investors, BHP has a trailing fully franked dividend yield of 7.4%. Of the shares in the ASX 20, it probably has a better chance than some of maintaining its dividend.
However, resource shares aren’t known for having stable dividends. ETFs offer better diversification than a single business and some technology shares like the ones below could offer much better growth over time.
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
