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2 ASX 200 shares to buy for dividends

These 2 S&P/ASX 200 Index (ASX:XJO) shares could be buys for dividends, including property business Centuria Industrial REIT (ASX:CIP).
The post 2 ASX 200 shares to buy for dividends appeared first on The Motley Fool Australia. –

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There are some quality S&P/ASX 200 Index (ASX: XJO) that could be options for dividends.

It’s hard to generate much income from the bank right now because of the low interest rate environment right now.

But these two ASX 200 dividend shares have fairly high yields for FY21:

Centuria Industrial REIT (ASX: CIP)

The broker UBS rates this real estate investment trust (REIT) as a buy with a price target of $3.54.

It’s the ASX’s largest listed pure-play industrial REIT, it now has 62 high quality industrial assets with a total portfolio value of more than $2.6 billion.

The ASX 200 dividend share has largely recovered from the COVID-19 crash, with the share price now back to $3.40. At the time of the FY21 half-year result release, it had an occupancy rate of 97.7% and a long weighted average lease expiry (WALE) of 9.8 years.

The Centuria Industrial REIT net tangible assets (NTA) has increased to $2.99 per share.

In FY21 it’s expecting funds from operations (FFO) per unit to be no less than 17.6 cents per unit (which is better than the 17.4 cents per units which was forecast at the start of the financial year).

Centuria Industrial REIT is expecting to pay a distribution per unit of 17 cents per unit, which is paid quarterly. That translates to a FY21 distribution yield of 5%.

Talking about the prospects of the REIT, Jesse Curtis, fund manger of the ASX 200 share, said:

CIP’s strategy is to deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets. Sector tailwinds continue to support investment fundamentals for industrial assets drawing both domestic and international capital to the sector. Tenant demand remains robust, particularly for high quality industrial assets located within infill locations close to major infrastructure. In a tightly held industrial market CIP’s portfolio will continue to be a key beneficiary of these sector themes.

APA Group (ASX: APA)

APA is one of the largest (energy) infrastructure businesses on the ASX. It owns and/or manages and operates a portfolio of assets worth around $22 billion. The key asset is a large national network of gas pipelines. APA also owns a number of other energy assets including gas storage, gas power station and renewable energy generation.

The business is always on the lookout to invest in new energy opportunities in Australia. It’s also looking for ideas in the US, which has been delayed because of the COVID-19 pandemic.

The ASX 200 dividend share has one of the longest growth streaks, going back before the GFC.

FY21 is no exception. In the half-year result, the business managed to increase its operating cashflow by 1.4% to $519 million and the distribution went up by 4.3% to 24 cents per security. APA funds its distribution growth from cashflow growth. Each new project can unlock more cashflow.

APA has established its ‘pathfinder program’ to explore a range of new energy technologies, many of which have the potential to leverage APA’s existing assets.

Organic capital growth is expected to be over $1 billion over FY21 to FY23, building on the $460 million Northern Goldfields Interconnect and $38 million Gruyere Hybrid Energy Microgrid announced in the period.

APA expects to pay a distribution of 51 cents per unit in FY21, which translates to a distribution yield of 5%.

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Returns As of 15th February 2021

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX 200 shares to buy for dividends appeared first on The Motley Fool Australia.

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