A handful of ASX dividend shares are expected to pay very large dividend yields over the next year or two.
With interest rates so low, most dividend-paying companies have higher yields than what someone can get from the bank. However, some have yields that are getting close to 10% (or even higher).
A big yield doesn't automatically mean that it's a good one for income, particularly if a dividend cut is just around the corner and that past yield is just an illusion.
But analysts believe that these two ASX dividend shares could pay very large yields:
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Rio Tinto Limited (ASX: RIO)
Rio Tinto is one of the ASX's biggest resource companies. It generates most of its earnings from iron ore, though other commodities do make a contribution including bauxite, aluminium and copper.
It's currently rated as a buy with a price target of $130. That's around 10% higher than where it is right now.
After a huge year of profit and cash flow in FY21, Credit Suisse is expecting another year of good dividends for investors again. The broker is expecting in FY22 that the grossed-up dividend yield is going to be 11.3%.
Credit Suisse thinks that Rio Tinto can continue to benefit from the higher resource prices that the world is generally seeing.
In FY22, the ASX dividend share is expecting to spend around $8 billion on capital expenditure in 2022, which "considers potential increases of around 15% for the Pilbara replacement projects."
Operating costs are expected to rise in 2022. Its Pilbara iron ore operations are expected to see the cost per wet metric tonne to rise from US$18.6 in 2021 to a range of US$19.5 to US$21 per wet metric tonne in 2022. This reflects higher input prices and labour costs, an increased mining work index and higher mine processing plant maintenance, offset by the ramp-up of Gudai-Darri and efficiency improvements.
GQG Partners Inc (ASX: GQG)
GQG is a large fund manager that offers investors a number of different investment strategies including US shares, global shares, ex-US international shares and emerging markets.
It's currently rated as a buy by the broker Morgans with a price target of $2.27. That's more than 50% higher than where it is today.
Morgans' dividend expectations suggest a dividend yield of 6.75% for FY23 and 6.1% in FY22.
Whilst it's pretty new to the ASX, it has been operating for several years. The FY21 result (which was the 12 months to 31 December 2021) showed growth. Average funds under management (FUM) rose 77% to $80.5 billion. Closing FUM at the ASX dividend share surged 36% to $91.2 billion. Net income after tax went up 81.6% to $304.9 million.
GQG says that it offers what it believes to be very attractive fees compared to competitors.
The fund manager continues to see strong business momentum in a variety of geographies and across channels. While its core strategies continue to represent the bulk of its FUM, it has launched some quality dividend income strategies as well. This gives clients the ability to utilise new services. It's working on new opportunities for growth over the long term.
The GQG share price is valued at 16x FY22's estimated earnings.
