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.
