BHP share price or dividend yield?

Fairfax columnist Michael Pascoe wrote an interesting piece a few weeks back with regard to the BHP dividend.  As most are probably aware there is much debate surrounding their "progressive dividend policy"and the current state of commodity prices.

With the BHP share price trending down over the previous six months and management steadfastly saying that dividends will not be cut, then at some point something has to give...  The share price or the dividend.

Or to quote Pascoe "Believe BHP and it is one of the great all-time buying opportunities. Believe Mr Market and that dividend is going to be reduced, meaning BHP shares might still be a reasonable buy but are not amazing."

Pascoe wrote the article on September 30 when the share price was around $22 and the dividend yield was 7.7% before franking credits.  Any further falls in the share price and I think it would be a pretty safe bet to side with Mr Market.

But the passage of time has seen a small bounce (10%) in the share price up to $25 and the dividend yield consequently dropping down to 6.9%

Source: Google Finance

So maybe BHP can win over Mr Market?  You be the judge and we'll take another look in a few months time.