This morning the BHP Group Ltd (ASX: BHP) share price is likely to trade lower when its shares go ex-dividend for its fully franked 55 U.S. cents per share final dividend.
This dividend will then be paid to eligible shareholders later this month on 22 September.
While some shareholders will be using this as income in this low interest environment, others may wish to reinvest the funds back into the share market.
For the latter group, here is where I would consider investing BHP’s dividends:
Cochlear Limited (ASX: COH)
If you’re looking to invest these funds into a quality growth share, then you could do a lot worse than Cochlear. I think the global leader in implantable hearing devices has the potential to generate strong returns for investors over the next decade. This is thanks to its exposure to the ageing populations tailwind, which looks set to underpin growing demand for hearing solutions products over the long term. And with the Cochlear share price down 25% from its 52-week high due to the pandemic, I think now could be an opportune time to invest.
Rural Funds Group (ASX: RFF)
If you want even more dividends then you might want to consider Rural Funds. It is a leading agriculture-focused property group with a diverse portfolio of assets which are spread across several industries and leased to some of the biggest players in the market. One big positive is the long term certainty that Rural Funds’ leases offer investors. With a weighted average lease expiry of almost 11 years and rental increases built in, Rural Funds appears perfectly positioned to deliver on its target of increasing its distribution by 4% per annum over the long term. Based on the current Rural Funds share price and its guidance for FY 2021, it offers investors a generous forward 5% distribution yield.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended Cochlear Ltd. 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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