2 top ASX shares I would buy now for shareholder value and dividend growth

Why Fortescue Metals Group Limited (ASX: FMG) and one other are top ASX shares in the buy zone right now.

| More on:
asx buy

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Looking for the best ASX shares to boost the value of your portfolio? Choosing ASX shares with both long-term growth prospects and reliable high-yield dividends is a foolproof way to build income and set-up your retirement early.

Here are 2 top ASX shares I would buy right now for shareholder value and dividend growth.

Dicker Data Ltd (ASX: DDR)

Dicker Data is an Australian wholesale and distributor of computer hardware, software and related products.  Its vendors include Hewett-Packard, Cisco, Toshiba, Lenovo, Microsoft, ASUS and other major brands.  Dicker Data services 5,000 retailers who in turn service multiple clients ranging from small and medium enterprises to large corporate businesses.

Dicker Data's half year 2020 group results in July didn't disappoint.  Total revenue was up 18.1% to $1,005.9 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 27.6% to $47 million. And net profit after tax rose 23.5% to $29.4 million.

Pleasingly for shareholders, the company's dividend growth was a massive 63.4% increase for FY19 compared to 20.2 cents per share (cps) for FY18.  In total, the company paid out 33 cents to shareholders in the last 12 months.  It plans to further increase its dividend to 35.5 cps this year.

Dicker Data has achieved double-digit revenue and profit growth for the past 5 years to become Australia's largest commercial distributor and leading market share distributor for most of its tier 1 vendors represented.

To maintain growth and preserve the company's strong balance sheet, Dicker Data has reduced its reliance on its top 5 vendors from 90% in FY12 to 57% in FY19.

I like Dicker Data because it pays quarterly dividends to shareholders and the business has been maturing consistently for a number of years.  Dicker Data has shown to be resilient in challenging conditions such as COVID-19 and is well-positioned for future growth

At the time of writing, the Dicker Data share price is down 2.97%, trading at $7.51. Still, I think Dicker Data offers investors a worthy buy.

Fortescue Metals Group Limited (ASX: FMG)

As the world's fourth largest iron ore producer, Fortescue has become a very important trade partner to China and other countries with a strong demand for the steel-making ingredient.

Fortescue's FY20 results released on Monday highlighted total revenue of $12.82 billion, an increase of 28.6% on FY19.  Underlying EBITDA was also up 38.4% to $8.375 billion, and net profit after tax climbed to $4.735 billion, a strong percentage boost of 48.5%.

The pure-play miner also boasts the industry's leading cost position on extracting and refining its key product, at C1 costs at US$12.94 per wet metric tonne.  Record shipments were exported of 178.2 million tonnes in the past year.

It's no wonder the Fortescue share price has exploded over the past 5 years from $1.62 to a whopping $18.64 (at the time of writing).  Of course, a major catalyst for the company's strong balance sheet is the rising spot price of iron ore which has a knock-on effect with the share price.

The company has a dividend yield of 10.59%, as shareholders have recently been rewarded with $1 for every Fortescue share held.  For FY20, the mining magnet's total dividend remuneration was $1.76.  For those lucky early investors who bought and kept Fortescue shares back in 2015, they would have a 108% payout on their initial investment in just one year.  That is the power of long-term investing.

I think Fortescue is a great ASX share to add on your portfolio.  The company offers shareholder value with strong growth in both its business and dividends.

Should you invest $1,000 in Life360 right now?

Before you buy Life360 shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Life360 wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Aaron Teboneras owns shares of Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why HMC Capital, Platinum, Sigma, and Skycity shares are dropping today

These shares are having a tough session on Tuesday. But why?

Read more »

A close-up photo of a ballot box with an Australian flag in front of it and a gentleman's hands placing his vote in the 2022 election inside the box
Share Market News

How these ASX 200 stocks are primed to gain from Labor's resounding Federal election win

With the Federal election in the rear-view, which ASX 200 stocks should I buy now?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Dimerix, Evolution Mining, Inghams, and NextDC shares are charging higher today

These shares are rising when many are falling today. But why?

Read more »

Smiling young woman eating chocolate outdoors.
Share Market News

The See's Candies playbook for ASX investors

Two ASX businesses that remind me of Buffett’s sweetest investment.

Read more »

Man smiling at a laptop because of a rising share price.
Opinions

My 2 favourite ASX sectors to invest in

Finding your groove can help your investing success.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
Opinions

3 things I learned from Warren Buffett being the CEO of Berkshire Hathaway

The Oracle from Omaha is in his last year as CEO.

Read more »

A male ASX 200 broker wearing a blue shirt and black tie holds one hand to his chin with the other arm crossed across his body as he watches stock prices on a digital screen while deep in thought
Share Market News

5 things to watch on the ASX 200 on Tuesday

Here's what to expect on the local market today.

Read more »

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough trading day for ASX stocks this Monday.

Read more »