With earnings season just over a month away, some investors might be considering which ASX dividend shares to buy or load up on following recent share price weakness.
ASX 200 mining shares have been major dividend payers in recent years. The big three are BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Metals Group Limited (ASX: FMG).
For investors wanting to cash in on the commodities boom (and the profits made by the big miners), there's still time to open a position or add to existing holdings before the next round of dividends.
BHP will release its full-year results and declare its final dividend payment on 16 August. Fortescue will do it on 29 August.
Rio reports on a different cycle. It will present its half-year results and declare its interim dividend on 27 July. It doesn't report its full-year results for FY22 until February 2023.
Here are some predictions from a few top brokers on the dividend yields likely to be paid out for FY22 by the big ASX 200 mining shares.
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The BHP dividend for FY22
'The Big Australian' has long been a stalwart stock for retiree investors. BHP's usually generous and reliable dividends have delivered a solid annual income to retirees and other investors for decades.
My Fool colleague James reported new predictions for the FY22 BHP dividend last week.
Goldman Sachs is forecasting a US$3.50 (AU$5.07) per share fully-franked dividend in FY22. Based on the current BHP share price of $42.64 and the currency valuation, that's a grossed-up yield of 17%.
Yep, no kidding.
Macquarie is on the same page as Goldman. In May, we reported that Macquarie expects BHP to pay a grossed-up dividend yield of 16.6% in FY22. At that time, BHP was trading at almost the same price as it is today.
The Rio Tinto dividend for FY22
James also reported this week that Goldman Sachs is tipping big dividends from Rio Tinto.
The broker is expecting an FY22 dividend of US$8.70 (AU$12.60) per share with 100% franking. Based on the Rio Tinto share price of $106.23 at the time of writing, that's a grossed-up dividend yield of 17%.
Macquarie's estimates are close at 16.3% — but remember, that was in May when Rio was trading about $4.50 higher. Either way, an impressive yield.
The Fortescue dividend for FY22
Macquarie forecasts a grossed-up dividend yield of 14% in FY22 from Fortescue. On the day we reported this prediction, the Fortescue share price closed at $19.92. Today, it's lower at $18.35.
Weaker ASX 200 mining share prices mean boosted yields
June hasn't been a great month for the S&P/ASX 200 Index (ASX: XJO). It's down 7.3% since the close on 31 May. During this time, the S&P/ASX 200 Resources Index (ASX: XJR) has also dipped 7.8%.
When share prices fall, dividend yields go up. That's because the dividend yield is expressed as a percentage of the share price.
While you have to be mindful of value traps, short-term drops in share prices due to general negative market sentiment can present a great opportunity. You can buy the dip and snap up reliable dividend-paying ASX shares for a lower price — and a higher yield — than usual.
During June, the BHP share price has dipped 4.2% and the Rio Tinto share price has dropped 7.2%.
The Fortescue share price has also fallen by 8.5%.
