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Where I would reinvest my ANZ dividends

James Mickleboro
Money

Later today Australia and New Zealand Banking Group (ASX: ANZ) will be giving its shareholders an early Christmas present. It will be paying eligible shareholders its 80 cents per share 70% franked final dividend.

If you’re looking to invest these funds back into the share market, then I think the three shares listed below could be good options. Here’s why I like them:

BHP Group Ltd (ASX: BHP)

If you’re looking for more dividends and are happy to invest in the resources sector, then I think BHP would be a great option. I believe the mining giant is one of the best income options right now due to the bumper free cash flows it is generating from its world class operations and favourable commodity prices. The good news for investors, is that BHP has a tendency of returning the majority of its free cash flow to shareholders through dividends or buybacks. Based on this, I estimate that its shares currently offer a fully franked forward ~5.5% dividend yield.

Nearmap Ltd (ASX: NEA)

Investors interested in buying growth shares might want to consider Nearmap. It is a leading aerial imagery technology and location data company which I believe has enormous growth potential. This is thanks to its leadership position in a global aerial imagery market estimated to be worth US$10.1 billion in 2020. In FY 2020 the company expects to report record annualised contract value (ACV) in the range of $116 million to $120 million. This represents a 28.6% to 33% increase year on year.

Xero Limited (ASX: XRO)

Another option to consider buying with these dividends is Xero. It is a leading cloud-based business and accounting software provider which has been growing at a strong rate in recent years. In the first half of FY 2020 the company reported a 30% jump in its annualised monthly recurring revenue to NZ$764.1 million. It also revealed that it has surpassed 2 million subscribers. Whilst this is a large number of subscribers, it is still only scratching at the surface of its enormous global market opportunity. I’m confident there will be further strong growth over the next decade, potentially making Xero a quality buy and hold option.

The post Where I would reinvest my ANZ dividends appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of Xero. 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019