The economic environment is uncertain for two of the ASX's largest sectors – mining and banking. I'm going to run through what the dividend projections are for FY25 with some of the largest S&P/ASX 200 Index (ASX: XJO) dividend shares.
The ASX bank share sector is facing rising arrears amid a high cost of living and elevated interest rates. For example, in the recent Commonwealth Bank of Australia (ASX: CBA) update for the third quarter of FY24, CBA said its arrears of home loans that were overdue by at least 90 days increased from 0.44% at March 2023 to 0.61% at March 2024.
According to Trading Economics, ASX iron ore shares, such as BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG), are facing uncertain demand from China. The Asian superpower's housing construction sector continues to experience difficulties while Chinese iron ore production is growing.
With that in mind, let's look at how big the dividend payments could be in FY25.
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Dividend projections
The following forecasts are based on estimates on Commsec. Remember, forecasts are just educated guesses by analysts – the payouts could be smaller or larger than projected.
Owners of CBA shares could receive a grossed-up dividend yield of 5.1%.
BHP could pay a grossed-up dividend yield of 7.6%.
National Australia Bank Ltd (ASX: NAB) is projected to pay a grossed-up dividend yield of 6.7%.
ANZ Group Holdings Ltd (ASX: ANZ) is forecast to pay a grossed-up dividend yield of 8.3%.
Westpac Banking Corp (ASX: WBC) is predicted to pay a grossed-up dividend yield of 7.9%.
Fortescue is forecast to pay a grossed-up dividend yield of 9.2%.
Rio Tinto Ltd (ASX: RIO) is projected to pay a grossed-up dividend yield of 8.1%.
Macquarie Group Ltd (ASX: MQG) is predicted to pay a grossed-up dividend yield of around 4%.
Wesfarmers Ltd (ASX: WES) is forecast to pay a grossed-up dividend yield of 4.6%.
Woodside Energy Group Ltd (ASX: WDS) is projected to pay a grossed-up dividend yield of 7.7%.
Telstra Group Ltd (ASX: TLS) is predicted to pay a grossed-up dividend yield of 7.5%.
Is this a good time to invest?
The ASX 200 share market has performed strongly since the end of October 2023, rising by 14%.
I don't think we can call the ASX bank shares good value, considering arrears are rising and competitive pressures remain. And I'm not bullish about the current iron ore price, so ASX iron ore shares don't strike me as bargains.
Currently, of the ASX 200 dividend shares I've mentioned, I'd call Telstra shares good value, and I'd also be happy to own Wesfarmers shares and Macquarie shares because of their ability to compound earnings over the long term.
