Bought $7,000 of BHP shares during the pandemic dip? Here’s how much passive income you’ve earned
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BHP Group Ltd (ASX: BHP) stocks have experienced a significant rebound since their lowest point during the pandemic, resulting in a generous passive income for shareholders.
Passive income investors who owned shares in the iron ore miner, S&P/ASX 200 Index (ASX: XJO), experienced significant rewards during the years 2021 and 2022.
Due to the elevated prices of iron ore, copper, and coal for a substantial period, BHP stocks delivered an unprecedented final dividend in 2021 and an unrivaled interim dividend in 2022. Both dividends were completely franked.
Moreover, it is worth mentioning that the iron ore mining company distributed two dividends throughout 2020, despite the disruptive impact of the COVID-19 pandemic on financial markets and the prevailing BHP share price at that particular moment.
This made me ponder.
If a courageous investor accurately analyzed the decline and purchased BHP shares worth $7,000 during the lowest point of the pandemic, how much money would they have already earned through passive income?
BHP Shares' Passive Income Since 20 Mar 2020?
Similar to the ASX 200 and the majority of stocks, BHP reached its lowest point during the pandemic-induced market slump on March 20th, 2020, with shares being traded at a price of $27.01.
So, if you had invested $7,000, you would have been able to purchase 259 shares of BHP at a pretty low cost.
The value of the mining company's stocks has risen by 67% since reaching its lowest point and is currently being traded at $45.23.
On its own, that would have transformed your initial investment of $7,000 into $11,715 in the current time.
However, what about that recurring income?
However, you would have met the requirements to receive the last dividend for the year 2020, which amounted to 75.5 cents for each share.
In the year 2021, you would have been given an interim payment of $1.311 for each stock you own and a final payment of $2.715 for each stock you own.
In the year 2022, shareholders of BHP received a partial dividend amounting to $2.81 per share, followed by a concluding dividend of $2.552 per share.
And up until now in this year, the ASX 200 mining company has distributed an interim dividend of $1.364 for each share. If you are a shareholder, that most recent amount of income received passively will have been transferred to your bank account on 30 March.
Therefore, what is the total amount of passive income accumulated?
According to my trusty calculator, the sum comes out to be $10.778 for each individual share.
This implies that the 259 BHP shares you purchased during the pandemic decline for $7,000 have already provided $2,791.50 of passive earnings, along with potential advantages in terms of taxes.
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