Luckily in this low interest rate environment, there are still a good number of ASX shares paying generous dividends.
But which ones should you be adding to your portfolio? Three ASX dividend shares that I would buy are listed below. Here’s why I like them:
Dicker Data Ltd (ASX: DDR)
Dicker Data is a wholesale distributor of computer hardware and software. I think it is one of the most underrated shares on the local market and have been very impressed with its strong growth over the last few years. Pleasingly, this positive form has continued in FY 2020, with first quarter profit before tax jumping 36.3% to $18.4 million. And with management appearing confident that demand will remain strong over the rest of the financial year, it has guided to a 31% increase in its dividend this year. This will bring it to 35.5 cents per share, which equates to a fully franked 5.1% yield.
Fortescue Metals Group Limited (ASX: FMG)
Another quality dividend share to consider buying is Fortescue Metals. With iron ore prices at sky high levels, Fortescue appears well-placed to reward shareholders handsomely with dividends again in FY 2020 and FY 2021. Especially given the company’s improving grades and ultra low costs. This should mean the miner is generating very high levels of free cash flow right now from its Pilbara operations. I estimate that its shares provide investors with a forward fully franked dividend of ~6%.
Woolworths Limited (ASX: WOW)
I think Woolworths is a good option for income investors. I like the conglomerate due to its quality brands (Woolworths supermarkets, Dan Murphy’s, BWS) and their defensive qualities. Combined with its supply chain improvement plans, I believe the company is well-positioned to continue growing its earnings and dividend at a solid rate over the next decade. At present I estimate that the company’s shares provide investors with a fully franked 3% FY 2021 dividend yield.
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More reading
- 3 ASX shares to own for the next 10 years
- Top brokers name 3 ASX shares to sell next week
- The best placed ASX stocks for the August reporting season
- Add the WOW factor to your investment portfolio. Why I think the Woolworths share price is a buy
- 2 ASX dividend shares with yields over 8%
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of Woolworths Limited. 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.
The post Why Fortescue and these ASX dividend shares could be top income options appeared first on Motley Fool Australia.
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