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Thinking about investing in BHP Group Ltd (ASX: BHP)? It's a name synonymous with Australian resources and a favourite among Aussie investors. But how has the investment actually performed over time? Let's take a look at what a $5,000 investment in BHP shares five years ago would be worth today, and explore the factors influencing this mining giant's stock performance.

BHP: A Mining Powerhouse

BHP is one of the world's largest resources companies, with operations spanning iron ore, copper, coal, and petroleum. Its significant presence in Australia, combined with global operations, makes it a key player in the resources sector. As of the end of FY2024, BHP boasted a staggering 617,115 individual shareholders, demonstrating its widespread appeal and trust amongst investors. Add in the significant holdings through superannuation funds, and the number of Australians with a stake in BHP is even larger.

The 5-Year Performance: A Look Back

Let's rewind to 2019. On May 23, 2019, BHP shares were trading around $34.40. Therefore, a $5,000 investment would have purchased approximately 145 shares (before brokerage fees, of course). Fast forward to today (October 26, 2024), and BHP shares are trading at around $44.60. This means those 145 shares are now worth roughly $6,487 – a substantial gain!

Calculating the Return

That's an impressive increase of $1,487, or a return of nearly 30% over five years. However, it's crucial to remember that this doesn't account for dividends paid out by BHP during that period. BHP is known for its generous dividend policy, and over five years, these dividends would have further boosted the overall return for investors.

Factors Influencing BHP's Stock Price

Several factors have influenced BHP's stock price over the past five years:

• Commodity Prices: The price of iron ore, copper, and coal – BHP’s key commodities – have fluctuated significantly. Increased demand from China, coupled with supply chain disruptions, has generally supported higher prices.
• Global Economic Conditions: Economic growth (or lack thereof) in major economies impacts demand for resources.
• Geopolitical Events: Trade wars, political instability, and global events can create uncertainty and volatility in commodity markets.
• Company Performance: BHP's operational efficiency, project developments, and strategic decisions also play a role.
• Interest Rates & Inflation: Rising interest rates and inflation can impact investor sentiment and resource sector valuations.

Is BHP Still a Good Investment?

While past performance is not indicative of future results, BHP remains a significant player in the global resources market. However, potential investors should carefully consider the current market conditions, commodity price forecasts, and BHP's future growth prospects. Diversification is always key – don't put all your eggs in one basket!

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.