The Fortescue Metals Group Limited (ASX: FMG) share price has sunk lower in morning trade after the iron ore producer's shares went ex-dividend for its 25 cents per share fully franked final dividend. This dividend will be paid to shareholders on October 3.
Whilst some shareholders may want to use this as a source of income to live on, others will no doubt look to reinvest it back into the share market.
Here's where I would reinvest this dividend:
Altium Limited (ASX: ALU)
Thanks to the incredible rise of the Internet of Things I believe Altium is perfectly positioned to deliver above-average earnings growth for the foreseeable future. According to research by global tech giant Cisco, by 2030 there will be an estimated 500 billion devices and objects connected to the internet. As the majority of these devices will need a printed circuit board (PCB) inside them, I expect demand for Altium's award-winning PCB design software will continue to grow at an exceptionally strong rate.
Galaxy Resources Limited (ASX: GXY)
If you like resources shares then my first pick in the sector remains this leading lithium miner. I believe Galaxy's world class assets put it in a strong position to profit over the next decade as demand for lithium increases at a rapid rate. I expect the recent decision by governments in the UK and France to ban the sale of traditional internal combustion engine vehicles by 2030 will only heighten demand for the element as electric vehicle usage grows exponentially.
Premier Investments Limited (ASX: PMV)
With its shares down almost 24% in the last 12 months, I think Premier Investments is now a great mix of value, income, and growth. At present its shares are changing hands at 19x trailing earnings and provide a trailing fully franked 4% dividend. I think the retailer could prove to be a bargain buy considering the explosive growth of its key Smiggle brand internationally. Management expects UK sales of the brand to grow to $200 million annually by 2019. By my estimate, this will be a 150% increase on the annualised sales it is generating in the country today.
