Insights

2 ASX dividend shares with generous yields

Fortescue Metals Group Limited (ASX:FMG) and this ASX dividend share offer income investors generous yields…
The post 2 ASX dividend shares with generous yields appeared first on The Motley Fool Australia. –

Are you looking to add some dividend shares to your portfolio next week? Then take a look at the ones listed below.

Here’s why they could be top options for income investors:

BWP Trust (ASX: BWP)

The first dividend share to look at is this retail property company.

BWP is the largest owner of Bunnings Warehouse sites across Australia, making it the envy of many retail landlords. At the last count, the company had a total of 68 properties which were leased to the home improvement giant.

Thanks to Bunnings’ strong performance over the last 12 months, BWP has been able to collect rent as normal this year. This even led to BWP reporting a 6% increase in profit during the first half of FY 2021, allowing the the company’s board to reaffirm its plans to pay a full year distribution of ~18.3 cents per share.

Based on the current BWP share price of $4.14, this equates to an attractive 4.4% dividend yield.

Fortescue Metals Group Limited (ASX: FMG)

Another dividend share to consider is Fortescue. It is one of the world’s leading iron ore producers. And what a time to be one!

With spot iron ore prices above US$200 a tonne, iron ore producers are currently generating significant free cash flow. And while Fortescue’s lower grade ore doesn’t command as great a price, it is still materially more than its cash costs per tonne.

In light of this and its favourable dividend policy, the company looks set to reward shareholders handsomely with dividends in the near term.

Ord Minnett expects this to be the case and is forecasting fully franked dividends of $3.29 per share in FY 2021 and $2.86 per share in FY 2022. With the Fortescue share price currently fetching $22.30, this will mean massive dividend yields of 14.7% and 12.7%, respectively.

The broker has a buy rating and $28.00 price target on the company’s shares.

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Returns As of 15th February 2021

More reading

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Why the Fortescue and BHP share prices are sinking this week

ASX 200 sinks, EML plunges, Appen soars

Should ASX iron ore producers worry as China plans to up its own production?

Why these ASX lithium shares are down for a 5th straight session?

The post 2 ASX dividend shares with generous yields appeared first on The Motley Fool Australia.

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