Fortunately, in this low interest rate environment, there are countless dividend shares for investors to choose from on the Australian share market.
But with so many to choose from, it can be hard to decide which ones to buy. To narrow things down, I have picked out three ASX dividend shares brokers think investors should buy:
Australian Pharmaceutical Industries Ltd (ASX: API)
According to a note out of Macquarie, its analysts have retained their outperform rating and $1.45 price target on this pharmacy chain operator and distributor's shares. This follows news that Pfizer Australia will start to distribute medicines through Australian Pharmaceutical Industries from September. This is expected to boost its earnings before interest and tax by $4 million per annum. Overall, the broker believes the company is well-placed for growth and is forecasting dividends per share of 5.2 cents in FY 2021 and 7.3 cents in FY 2022. Based on the current Australian Pharmaceutical Industries share price of $1.17, this will mean fully franked yields of 4.5% and 6.2%, respectively.
Fortescue Metals Group Limited (ASX: FMG)
Analysts at Ord Minnett have retained their buy rating and $28.00 price target on this iron ore producer's shares. According to the note, the broker has been looking at the first development project being planned by the company's Fortescue Future Industries business. It appears to support the development, suggesting that green ammonia demand could be significant in the future. Outside this, the broker continues to expect Fortescue to deliver bumper free cash flows in the near term thanks to the sky high iron ore price. Ord Minnett believes this will lead to fully franked dividends of $3.29 per share in FY 2021 and $2.86 per share in FY 2022. With the Fortescue share price currently fetching $22.42, this will mean massive dividend yields of 14.7% and 12.7%.
G8 Education Ltd (ASX: GEM)
A note out of UBS reveals that its analysts have retained their buy rating and $1.30 price target on this childcare centre operator's shares. This follows the release of its annual general meeting update earlier this week. The broker is pleased with the way the company's occupancy rates are improving and expects the Federal Budget to support further improvements. Overall, it believes the company will be well-positioned for growth from FY 2022, which it suspects could support a re-rating of its shares. UBS expects fully franked dividends of 4 cents per share in FY 2021 and 6.1 cents per share in FY 2022. Based on the current G8 Education share price of 97.2 cents, this will mean 4.1% and 6.3% yields for investors.
