If you’re planning to add some dividend shares to your portfolio next week, then the ones listed below could be worth considering.
Here’s why I think they are top options for income investors right now:
BHP Group Ltd (ASX: BHP)
If you don’t mind investing in the mining sector, then you might want to consider buying BHP. I think it is a great dividend option right now due to its generous yield and positive outlook. Thanks to its world class operations and their low costs, I believe BHP is well-positioned to continue generating high levels of free cash flow over the coming years. Especially with iron ore at such strong prices.
And given the strength of its balance sheet, I suspect the majority of its free cash flow will be distributed to shareholders through dividends. In light of this, I estimate that the mining giant’s shares currently provide investors with a fully franked ~5% FY 2021 dividend yield.
National Australia Bank Ltd (ASX: NAB)
Another option for investors to consider buying for dividends is NAB. The banking giant’s shares have fallen heavily this year due to concerns over a potential spike in bad debts because of the pandemic. While I feel a rise in bad debts is inevitable, I’m optimistic the provisions it has made are more than enough to cover the potential damage.
In light of this, I feel the worst is behind the bank and now would be a good time to consider a long term investment in its shares. Especially for income investors in this low interest rate environment. At present, I estimate that NAB’s shares offer a generous fully franked 5.2% FY 2021 dividend yield. This is materially better than the interest rates offered with its term deposits and savings accounts.
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More reading
- Consider these blue chip ASX shares for strong dividend yields
- These were the best performers on the ASX 200 last week
- Short-sellers are stepping up their attack against these popular ASX shares
- ASX 200 up again, ASX retailers make big gains
- The ASX big bank stock with the best forecast dividend yield for the new year
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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