How Will BHP’s New DRP Price Shape Shareholder Returns?
BHP Group Limited has updated its dividend announcement, revealing the dividend reinvestment plan price for the first half of fiscal 2025. The fully franked dividend of USD 0.60 per share will be paid on 25 September, with shareholders able to reinvest at a DRP price based on recent market transactions.
- USD 0.60 per share fully franked dividend for six months ending 30 June 2025
- Dividend payable on 25 September 2025 with record date 5 September
- Dividend Reinvestment Plan (DRP) price set at AUD 41.8819 based on on-market share purchases
- Shareholders can elect dividend payments in multiple currencies including AUD, USD, GBP, NZD, and ZAR
- No discount applied to DRP shares; full participation option available
Dividend Update and Context
BHP Group Limited has provided an important update to its dividend announcement for the first half of fiscal 2025, confirming the dividend reinvestment plan (DRP) allocation price. The company declared an ordinary dividend of USD 0.60 per share, fully franked, relating to the six-month period ending 30 June 2025. This dividend is scheduled for payment on 25 September 2025, with a record date of 5 September.
The update follows the initial announcement made on 8 September 2025 and clarifies the DRP price, which is a key detail for shareholders considering reinvestment options. BHP’s DRP allows shareholders to reinvest their dividends into additional shares rather than receiving cash, a popular choice for those seeking to compound their investment over time.
DRP Price and Currency Flexibility
The DRP price has been set at AUD 41.8819 per share. This price was determined through on-market purchases of BHP shares conducted shortly after the dividend payment date, averaging the actual transaction prices. Notably, BHP has not applied any discount to the DRP price, which means shares are acquired at market value, reflecting a transparent and fair approach for participants.
In addition to the DRP details, BHP has reiterated its flexible currency arrangements for dividend payments. Shareholders can elect to receive dividends in Australian dollars (AUD), US dollars (USD), British pounds (GBP), New Zealand dollars (NZD), or South African rand (ZAR). This multi-currency option caters to BHP’s diverse shareholder base across different regions, enhancing convenience and potentially mitigating currency risk for investors.
Franking and Tax Considerations
The dividend is fully franked at 100%, meaning it carries Australian franking credits that can be valuable for Australian tax residents. The corporate tax rate applied for franking credits is 30%. There are no unfranked components or conduit foreign income amounts associated with this dividend, simplifying the tax implications for shareholders.
Shareholders who do not participate in the DRP will receive their dividend payments in cash, defaulting to their nominated currency or receiving a cheque in Australian dollars if no currency election is made. The deadline for shareholders to lodge currency election or DRP participation notices was 8 September 2025.
Looking Ahead
This update provides clarity for investors on how they can manage their dividend income and reinvestment strategies with BHP. The absence of a DRP discount and the transparent pricing methodology may influence shareholder participation rates. Additionally, the currency flexibility underscores BHP’s commitment to accommodating its global investor base.
Bottom Line?
BHP’s clear DRP pricing and multi-currency dividend options set the stage for shareholder decisions ahead of the payment date.
Questions in the middle?
- How will shareholder participation in the DRP compare to previous periods without a discount?
- Will currency fluctuations impact the attractiveness of dividend payments in non-USD currencies?
- Could BHP consider introducing a DRP discount in future dividends to incentivize reinvestment?
