2 ASX 200 dividend shares that could offer good income

There might be some S&P/ASX 200 Index (ASX:XJO) shares that can offer solid dividend income, like Magellan Financial Group Ltd (ASX:MFG).
The post 2 ASX 200 dividend shares that could offer good income appeared first on The Motley Fool Australia. –

There could be some good in the S&P/ASX 200 Index (ASX: XJO) dividend shares that may be candidates for income.

Businesses that have grown to a certain large size have the potential to sustain a high dividend payout ratio and continue to keep growing earnings.

These two ASX 200 dividend income shares could be interesting candidates.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is predominately a funds management business. It has over $100 billion of funds under management and it’s rated as a buy by the broker Morgans with a price target of $58.26.

The company has a dividend policy of interim and final dividends being based on 90% to 95% of profit of the funds management business excluding crystallised performance fees. It also pays an annual performance fee dividend of 90% to 95% of net crystallised performance fees after tax.

Magellan makes a lot of profit from its funds management business. Higher funds under management (FUM) leads to higher management fees which largely falls to the net profit line.

In the FY21 half-year result, its management fees grew 8% to $309.4 million and the funds management business’ profit before tax and before performance fees increased 8% to $256.2 million. That helped the interim dividend increase by 5% to 97.1 cents per share.

The ASX 200 dividend share continues to see long-term growth of FUM – in April 2021, total FUM rose from $106 billion to $110.4 billion. It’s also making investments into private businesses that have long-term growth potential and can provide useful information to Magellan such as Barrenjoey and Guzman y Gomez.

Morgans thinks that Magellan is going to pay a FY21 dividend that amounts to a yield of 4.5% in FY21.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT), it’s one of the larger ones on the ASX with a market capitalisation of around $3 billion.   

Charter Hall Long WALE REIT is currently rated as a buy by Citi with a price target of $5.30. The aim of the ASX 200 dividend share is to have a portfolio of properties that are rented to high-quality tenants with long leases.

The REIT recently announced acquisitions for a total cost of $415.4 million. It’s buying the Services Australia building in Tuggeranong, ACT, for $153 million, the ATO building in Box Hill, Victoria, for $115 million, the Red Cross building in Alexandria, NSW, for $79.5 million and the ATO building in Albury, NSW, for $42.5 million.

It also settled the acquisition of a 100% interest in an Ampol Ltd (ASX: ALD) anchored long weighted average lease expiry (WALE) convenience retail property in Redbank Plains, Queensland, for $25.4 million.

These acquisition reflect a passing yield of 5.2%, with a long WALE of 9.2 years and a weighted average revenue review (WARR) of 3.6% per annum. It increases the exposure to government tenants from 16% to 21%.

Management believe the acquisition supports the ASX 200 dividend share’s secure and growing income profile.

It now has 464 properties worth almost $5 billion with a 97.7% occupancy rate, a WALE of 13.8 years and a WARR of 2.3%.

The REIT aims to have a distribution payout of 100% of operating earnings per security (EPS). It’s expecting to generate 29.2 cents of EPS in FY21, translating into a yield of 6.1%. The property business also provided FY22 operating EPS guidance of growth of at least 2.75% compared to FY21. That suggests an FY22 yield of around 6.3%.

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Returns As of 15th February 2021

More reading

Why the Charter Hall REIT (ASX:CLW) share price is frozen
2 ASX dividend shares to buy with yields above 5%

Why is the Magellan (ASX:MFG) share price up 4% today?
2 ASX 200 shares to buy for dividends

ASX 200 rises, Macquarie falls, Magellan declines

The post 2 ASX 200 dividend shares that could offer good income appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!