Luckily in this low interest rate environment, there are a good number of dividend shares offering attractive yields.
Three top dividend shares that I would buy right now are listed below. Here’s why I like them:
Dicker Data Ltd (ASX: DDR)
The first dividend share to consider buying is Dicker Data. It is a wholesale distributor of computer hardware and software which has continued its positive form in FY 2020 despite the pandemic. At the start of the month it released a half year update and revealed unaudited first half revenue of $1 billion and net profit before tax of $40 million. This was an increase of 18.3% and 25%, respectively, on the prior corresponding period. Management appears confident this strong form will continue. So much so, 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 4.8% yield based on the current Dicker Data share price.
Fortescue Metals Group Limited (ASX: FMG)
Another dividend share to consider buying is Fortescue Metals. I think it could be a top option right now thanks to sky high iron ore prices. The combination of its low costs, higher grades, and strong prices appear to have left the miner well-placed to generate bumper free cash flows from its Pilbara operations in FY 2020 and FY 2021. I expect the majority of these funds to be returned to investors through dividends. Based on the current Fortescue share price, I estimate that it offers a forward fully franked dividend of ~6%.
Wesfarmers Ltd (ASX: WES)
A final dividend share to consider buying is Wesfarmers. I think it would be a good option for income investors due to its portfolio of strong businesses. This is particularly the case for the Bunnings business, which looks well-placed for growth thanks to its high quality business model and government stimulus. And given how it is Wesfarmers’ biggest contributor to earnings, this bodes well for the company’s overall performance. In addition, Wesfarmers’ hefty cash balance should be supportive of potential earnings accretive M&A activity in the near future. All in all, based on the current Wesfarmers share price, I estimate that it offers a fully franked 3.4% FY 2021 dividend yield.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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- Broker tips on how to invest for the August ASX reporting season
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- Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie
- Goldman Sachs names the ASX retail shares to buy and the ones to avoid
- My bull and bear case for the ASX share market
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 Wesfarmers 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.
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