Another day, another record broken, as far as the ASX is concerned. The ASX-200 index surged ahead by 0.5% today to 7431.4 points today. Among the top sectors were Materials, Energy, and Consumer Services. IT and Healthcare were the worst performers on the day. OZL shares gained the most today among the ASX-200 equities on the back of a spectacular Q2 earnings update. Bluescope Steel came in a close second, with shares gaining 6.4%.
The expectations for earnings season is high and ASX profits are starting to impress. Another factor that has buoyed investor sentiment is the number of M&A deals recently. In light of earnings season and the importance of dividends, here are the top ASX dividend shares to consider.
Metcash is Australia’s leading wholesale distribution and marketing company with sales of over $13 billion in FY20. They are the owners of popular retail brands like IGA, Mitre 10 and Foodland. In liquor it owns The Bottle-O, Cellarbrations and Duncans.The $4.1 billion market cap company has been performing exceptionally well in the current market environment and MTS shares are now trading at levels last seen in 2013. MTS shares have delivered 46% in the past year and over 20% in 2021 alone, and at a current dividend yield of 4.36%.
Metcash has been boosted by the current operating conditions in the market. Their sales have increased owing to the “at home” activities that most Australians now find themselves doing regularly, such as cooking, DIY maintenance and beverage consumption. These have acted as growth drivers and an increased preference for shopping locally has also helped to boost Metcash’s sales. With the boost in sales, Metcash also announced buybacks recently and increased their target dividend payout ratio. Metcash will increase the ratio from 60% to 70% of underlying net profit after tax, effective FY2021. MTS shares are well supported with structural tailwinds in the industry, a favourable operating environment. Add to this the strong dividend yield that MTS shares have, and MTS shares become a top dividend stock on the ASX.
Fortescue Metals Group is one of the largest iron ore producers in the world and it has performed exceptionally well during a very turbulent 2020. FMG has returned over 100% in the past year, with significant gains in the past 6 months. High iron ore prices and a halt in operations to one of its biggest competitors has resulted in an exceptional share price performance. They are also one of the top dividend stocks listed on the ASX with current annual yields coming in at over 9%. FMG is arguably the best pure play iron ore stock on the ASX. They have had a record half year with shipments, earnings, and operating cash flows being at all time highs.
With iron ore prices sky high, their full year profits will swell once again – leading to higher dividend payouts. FMG is a top class ASX share to own right now with high iron ore prices and a strong Aussie dollar providing tailwinds.
The guidance for FY2021 shipments has been increased to 178-182 metric tonnes. FMG is a top class ASX share to own right now with high iron ore prices and a strong Aussie dollar. The dividends are all but guaranteed and share price growth should be above average. The scene is set for a stellar earnings report for FY21 and FMG is also poised to deliver a stellar dividend yield in light of the favourable operating environment that has remained for close to a year now. In our opinion, FMG shares is the top dividend stock every Aussie investor should consider!
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