Fortescue Metals Group Limited (ASX:FMG) and this ASX dividend share could be top options for income investors. Here’s why…
The post Two of the best ASX dividend shares to buy in February appeared first on The Motley Fool Australia. –
Are you looking to buy some dividend shares next week? Then listed below are two shares that might be worth considering.
Here’s why they are being tipped as dividend shares to buy:
Bravura Solutions Ltd (ASX: BVS)
The first share to look at is Bravura Solutions. This leading provider of software products and services to the wealth management and funds administration industries isn’t normally regarded as a dividend share, but a significant pullback in the Bravura share price has made it one.
That share price weakness has been driven by concerns over the impact that the pandemic and Brexit have been having on its performance. While a weak result is expected in FY 2021 for these reasons, management appears confident that demand will bounce back once these headwinds ease.
Goldman Sachs remains positive on the company and thinks investors should deal with this short term pain due to the potential long term gains.
It believes Bravura is well positioned due to its strong market position, high degree of recurring revenue, and its emerging microservices ecosystem strategy. It has a buy rating and $5.00 price target on its shares.
It is also forecasting a ~10.6 cents per share dividend in FY 2021. Based on the current Bravura share price, this represents a 3.5% dividend yield.
Fortescue Metals Group Limited (ASX: FMG)
The second ASX dividend share to look at is Fortescue. It is one of the world’s leading iron ore producers and a company that has been rewarding its shareholders handsomely with dividends in recent years.
This has been underpinned by its strong free cash flow generation thanks to significant cost reductions, an increase in its grades, production and shipment growth, and favourable iron ore prices.
In respect to the latter, the spot iron ore price was trading at US$168 a tonne late last week. This compares very favourably to Fortescue’s C1 costs of just US$12.74 per wet metric tonne.
Unsurprisingly, with margins as strong as that, Fortescue has been tipped to reward shareholders with bumper dividends again in FY 2021.
One broker that certainly expects this to be the case is Macquarie. It is forecasting a fully franked $2.04 per share dividend over the next 12 months. Based on the current Fortescue share price, this equates to a sizeable 9.4% dividend yield.
Macquarie has an outperform rating and $26.50 price target on Fortescue’s shares.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Two of the best ASX dividend shares to buy in February appeared first on The Motley Fool Australia.