2 ASX 200 dividend shares rated as buys

These dividend shares offer investors attractive yields…

| More on:
A stopwatch ticking close to the 12 where the words on the face say 'Time to Buy' indicating its the bottom of the falling market and time to buy ASX shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Are you looking to add some dividend shares to your portfolio? Then take a look at the ones listed below.

Here's why they could be top options for income investors this week:

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the world's leading iron ore producers and is benefiting greatly from the sky high prices being commanded by the steel making ingredient.

At present, the spot iron ore price is trading at ~US$220 a tonne. And even though Fortescue's lower grade ore doesn't command as high a price as that, it is still receiving significantly more than its costs per tonne. This means Fortescue is generating material free cash flow right now. And given management's penchant for returning funds to shareholders, this bodes well for dividends in the near term.

According to a note out of Macquarie from last week, the broker expects Fortescue to pay dividends of $3.40 per share in FY 2021 and then $2.43 per share in FY 2022. Based on the latest Fortescue share price of $23.22, this will mean fully franked yields of 14.6% and 10.5%, respectively.

Macquarie has an outperform rating and $27.00 price target on the miner's shares.

Wesfarmers Ltd (ASX: WES)

Another option to consider is Wesfarmers. This conglomerate has been performing very positively in FY 2021 thanks to solid growth across the majority of its businesses.

The star of the show has been the key Bunnings business. The hardware giant has been benefiting from home improvement-related government stimulus and the booming housing market. This led to Bunnings reporting a 35.8% increase in earnings before interest and tax (EBIT) to $1,274 million. This represents 62% of Wesfarmers' EBIT of $2,058 million for the half.

Macquarie is also a fan of Wesfarmers and currently has an outperform rating and $58.12 price target on its shares.

The broker is forecasting fully franked dividends of $1.74 per share in FY 2021 and $1.76 per share in FY 2022. Based on the latest Wesfarmers share price of $55.00, this represents attractive yields of 3.15% and 3.2%, respectively.

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Dividend Investing

Invest $10,000 in New Hope shares and get $1,006 in passive income

Many ASX investors buy New Hope shares for their high yielding, fully franked dividends.

Read more »

A man in a suit looks serious while discussing business dealings with a couple as they sit around a computer at a desk in a bank home lending scenario.
Dividend Investing

Forget term deposits and buy these ASX 200 dividend shares

Analysts have good things to say about these dividend options.

Read more »

An Australian farmer wearing a beaten-up akubra hat and work shirt leans on a fence with livestock in the background and a blue sky above.

Should you buy this ASX REIT for its 6% dividend yield?

This expert is telling investors to take advantage of a 6% yield...

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Here's the BHP dividend forecast through to 2028

Will the Big Australian continue to reward shareholders with big dividends?

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Analysts say these ASX 200 dividend stocks are best buys in April

What are analysts saying about these high quality companies?

Read more »

A man in a business suit whose face isn't shown hands over two australian hundred dollar notes from a pile of notes in his other hand to an outstretched hand of another person.
Dividend Investing

Buy these ASX dividend shares for income

Analysts have put buy ratings on these income stocks.

Read more »

footwear asx share price on watch represented by look holding shoe and looking intently
Consumer Staples & Discretionary Shares

Does this ASX 300 retail stock really have a 7.6% dividend yield right now?

Is a 7.67% dividend yield too good to be true?

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Dividend Investing

Brokers say these ASX 300 dividend stocks are top buys

Attractive dividend yields could be on offer with these shares.

Read more »