With interest rates at record lows and unlikely to go higher for some time, it is increasingly difficult for income investors to earn a sufficient income from traditional interest-bearing assets.
Fortunately, the Australian share market has come to the rescue with a large number of dividend shares offering generous yields.
Two ASX dividend shares with above-average yields are listed below:
BWP Trust (ASX: BWP)
BWP Trust is the owner of 68 Bunnings Warehouse sites across Australia. Thanks to the strength of the Bunnings business, BWP has been able to collect its rent largely as normal during the pandemic. This, combined with an increase in the fair value of its assets, led to the company reporting a 24.4% increase in full year profit to $210.6 million in FY 2020.
It was thanks to this positive form that the BWP board was able to increase its distribution to 18.29 cents per unit. Based on the current BWP share price, this represents a trailing 4.2% yield for investors. Management advised that a similar dividend is expected in FY 2021.
Fortescue Metals Group Limited (ASX: FMG)
Fortescue is one of the world’s leading iron ore producers. Over the last few years the company has generated staggering returns for investors. This has been driven by significant cost reductions, an increase in its grades, production growth, and favourable iron ore prices.
The good news for Fortescue and its shareholders is that the iron ore price climbed well beyond US$130 a tonne and to its highest level since 2013 last week. This compares to Fortescue’s current C1 costs of US$12.74 per wet metric tonne.
Given the margins the company is operating with and its strong balance sheet, Fortescue is being tipped to reward shareholders with bumper dividends in FY 2021. Macquarie, for example, is forecasting a fully franked $1.64 per share dividend over the next 12 months. Based on the current Fortescue share price, this equates to a sizeable 8% dividend yield.
These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)
Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.
Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.
Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.
Click Here For Your Free Stock Report
Returns As of 6th October 2020
More reading
- Are ASX stocks about to get an earnings upgrade boost in the new year?
- 2 ASX dividend shares with generous 4%+ yields
- Why ASX iron ore stocks like the Fortescue (ASX:FMG) share price are surging today
- Why Flight Centre, Fortescue, Kogan, & Telix shares are racing higher
- ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post 2 ASX dividend shares with generous yields appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/2JSSesx
Leave a Reply