The S&P/ASX All Ordinaries Index (ASX: XAO), or All Ords, shares in this article are expected to pay large dividend yields in the medium term.
A business that is able to generate good profit and cash flow is able to fund dividends for shareholders — if it chooses to. If a business has a relatively high dividend payout ratio and a fairly low price/earnings (p/e) ratio, it could mean the dividend yield is high.
I like the idea of receiving a good amount of the annual return in the form of dividends. Getting cash in the bank is satisfying, particularly when one has to do so little work for it after the initial investment.
With that in mind, these are two All Ords ASX dividend shares that could pay large dividend yields in 2023:
GQG Partners Inc (ASX: GQG)
GQG Partners is one of the largest fund managers on the ASX with a market capitalisation of $4.7 billion.
It offers investors a number of different investment strategies including US shares, global shares, dividend shares, and so on.
The company recently announced its FY22 half-year result which showed that its average funds under management (FUM) increased 23%, net revenue increased 21.3% US$222.7 million, and net operating income went up 18.3% to US$174.2 million.
It aims to pay dividends that amount to 90% of its distributable earnings. In the first half of FY22, it generated US$133.3 million of distributable earnings.
GQG boasts that less than 3% of its revenue in the first half came from performance fees. It believes asset-based fees will be more stable in periods of market volatility.
The All Ords ASX dividend share had positive net inflows of US$6.3 billion over the half, despite a challenging market environment and continued industry outflows and overall negative market returns.
Looking at the expected dividend yield, according to CMC Markets, GQG is expected to pay an annual dividend of 12.5 cents per share. That translates into a potential forward dividend yield of 7.8% in FY23.
BHP Group Ltd (ASX: BHP)
BHP is one of the world's biggest dividend payers and it's also one of the largest global resource businesses.
It generates significant profit from its iron ore division, but there are other commodities in the portfolio that enable BHP to generate revenue including nickel, copper, and metallurgical coal (for making steel). The resources giant is also working on a potash (fertiliser) project in Canada called Jansen which is expected to have a long life and generate strong margins.
The All Ords ASX dividend share just unveiled its FY22 result which included a large final dividend payment. But, FY23 could be another bountiful year for dividends.
But how big could the dividend be? Let's have a look at a couple of the estimates.
On CMC Markets, BHP is expected to pay an annual dividend of $3.18 per share. That translates into a grossed-up dividend yield of 10.9%. The broker Morgans is expecting a much larger dividend, translating into a possible FY23 grossed-up dividend yield of 13.6%.
