BHP Group (ASX:BHP) posted a strong fiscal 2026 result with a higher-than-anticipated 66% dividend payout and a 10% dividend beat, according to a Tuesday note by RBC Capital Markets.
Copper contributed 54% to group earnings before interest, taxes, depreciation, and amortization (EBITDA). The mining firm is now targeting a self-funded 40% copper production increase during fiscal 2026 to fiscal 2035 with around $12 billion of cumulative free cash flow from copper during fiscal 2027 to fiscal 2031.
Copper EBITDA was $18.2 billion, 4% higher than consensus, offset by a 6% miss in coal and a 1% miss in iron ore.
RBC forecast average annual free cash flow of $11 billion and net debt below $10 billion. It lifted the assumed dividend payout for BHP to 60% from 50% during the covered period.
The investment firm maintained a sector perform rating on BHP and raised the price target to AU$60 per share from AU$57 per share.