Motley Fool Australia

Where to invest your BHP (ASX:BHP) dividends

Close up of hands holding US bank notes
Image Source: Getty Images

Tofay eligible BHP Group Ltd (ASX: BHP) shareholders will be paid the mining giant’s fully franked 75.5 cents per share fully franked dividend.

While some investors will use this for income, others may wish to reinvest these funds back into the share market.

Here’s where I would invest these dividends:

Appen Ltd (ASX: APX)

If you’re looking to invest these funds into a growth share, then I feel Appen could be one to consider. Especially given its exposure to the rapidly growing artificial intelligence market as the global leader in the development of high-quality, human-annotated training data.

Through its team of over 1 million crowd-sourced workers, Appen is able to collect and label high volumes of image, text, speech, audio, and video data that is used to build and improve artificial intelligence models. With businesses and governments continuing to invest heavily in the space, I expect demand for its services to grow strong over the coming years. This should put Appen in a position to continue growing its earnings at a strong rate long into the future.

Rural Funds Group (ASX: RFF)

If you’re looking for even more dividends, then you might want to consider Rural Funds. It is an agriculture-focused property company which owns a portfolio of high quality property assets with long tenancy agreements. And when I say long, I mean long. Rural Funds finished FY 2020 with a weighted average lease expiry of ~11 years.

And given that the company has rental increases built into these leases, it is exceptionally well-positioned to deliver on its distribution target. Management is aiming to increase its distribution by 4% per annum over the long term. It has already committed to this in FY 2021 and plans to lift its distribution by this margin to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.9% yield.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Appen 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.

Related Articles...

Latest posts by James Mickleboro (see all)