ASX-listed companies Fortescue Metals Group (AU:FMG) and BHP Group (AU:BHP) are famous for their dividends in Australia. Despite experiencing less favorable share price growth, these companies maintain healthy dividends and are well-suited for income investors.
Let’s take a look at these companies in detail.
Is FMG a Good Dividend Stock?
Fortescue Metals Group is a mining company engaged in the exploration, mining, transportation, and marketing of iron ore.
The company has a dividend yield of 10.6%, as compared to the sector average of just 1.88%. For 2022, the company paid a total dividend of AU$2.07 per share. The expected dividend for fiscal year 2023 is AU$1.90 per share. Analysts expect a slight downfall in the company’s earnings and dividends in 2023, but it will still remain at the top of the game.
Overall, FMG stock carries a Strong Sell rating on TipRanks based on a total of eight Sell recommendations. The average price prediction is AU$17.57, which is 11.14% lower than the current share price.
BHP Dividend History
BHP is an Australian mining company involved in the exploration, development, production, and processing of mineral resources.
The company has a history of paying attractive dividends in the past, making it the country’s top consistent payer. Over the past decade, BHP has distributed a cumulative dividend of $19.696 per share. The company has a dividend yield of 9.63%.
For the fiscal year 2023, the company announced an interim dividend of $0.9 per share, down from $1.50 in the corresponding period last year. Even though the company witnessed a 16% decline in revenues and a 27% drop in profits during this period, it opted to distribute dividends to shareholders at a payout ratio of 70%.
According to TipRanks, BHP stock also has a Moderate Buy Buy rating based on five Buy, eight Hold, and one Sell recommendations. The target price of AU$44.90 is 3.24% higher than the current price level.
Conclusion
These shares have earned a notable reputation for delivering significant passive income to shareholders. Among these companies, analysts express a bearish outlook on FMG stock in terms of share price growth, whereas BHP holds a Moderate Buy rating.
However, their dividends position them as a viable choice for investors focused on generating income.
