The spotlight is on BHP Group Ltd (ASX: BHP) as investors await its FY24 half-year results, scheduled to be reported tomorrow. However, the ASX mining share has experienced a decline of 9.75% since the beginning of the year, prompting questions about its current attractiveness to investors. 

Challenges Faced by BHP Shares 

In recent times, several factors have contributed to the downward trend in BHP's share price. The iron ore price has dipped below US$130 per tonne, placing pressure on the company's profitability. Additionally, the nickel industry has experienced deteriorating conditions, leading to a substantial impairment of BHP's nickel division amounting to US$3.5 billion, pre-tax. Furthermore, BHP has recognized an income statement charge of approximately US$3.1 billion, pre-tax, related to the Samarco dam failure in Brazil. 

Considerations Before Investing 

As BHP prepares to release its half-year results, investors are faced with the decision of whether to buy shares ahead of the earnings announcement. While much is already known about BHP's operational performance, uncertainties remain regarding the size of the dividend yield payout. The recent impairments and charges could potentially impact the dividend amount, leading to investor disappointment. 

Market Valuation and Potential Returns 

According to estimates from Commsec, BHP shares are currently valued at 10.7x FY24's estimated earnings, with a possible grossed-up dividend yield of 7.6%. Despite the upcoming earnings release, some investors may have already factored in the negative news, resulting in a muted reaction to the financial results. 



Conclusion 

While the anticipation of BHP's half-year results looms, the decision to invest in the ASX mining share requires careful consideration. Although a strong iron ore price may bolster short-term profitability, investors may prefer to wait for a weaker commodity price cycle before entering the market. As with any investment, timing is crucial, and investors should weigh the potential risks and rewards before deciding on BHP shares.