2 bountiful ASX dividend shares rated as buys by brokers

These two ASX dividend shares have been rated as buys by brokers. They are expected to pay out bountiful income in FY21.
The post 2 bountiful ASX dividend shares rated as buys by brokers appeared first on The Motley Fool Australia. –

man handing over wad of cash representing ASX retail capital return

There are a handful of ASX dividend shares that have been rated as buys by dividends. These businesses offer bountiful payouts and could pay even bigger payments in FY21.

Stocks with good yields are in higher demand at the moment because of how low official interest rates are right now.

Brokers have picked out these two ASX shares as ideas:

Waypoint REIT Ltd (ASX: WPR)

Waypoint is Australia’s largest real estate investment trust (REIT) that is a pure play on fuel and convenience retail real estate.

It’s currently rated as a buy by the broker Morgans, it has a price target on the ASX dividend share of $2.94.

Morgans liked how Waypoint REIT’s income kept flowing from tenants in FY20 despite all of the COVID-19 impacts. In FY20 Waypoint was able to grow its distributable earnings per security (EPS) by 4.25% to 15.15 cents.

In FY21, the REIT is expecting to grow its distributable EPS by 3.75% to 15.72 cents. The expected FY21 growth is primarily underpinned by fixed 3% rent increases across the majority of the portfolio. That includes the sale of $20 million to $30 million of non-core assets, but assumes no acquisitions.

At 31 December 2020, its net tangible assets (NTA) per security was $2.49 – an increase of 8.7% over the prior corresponding period. The current share price is trading at around that NTA.

In FY21, Morgans is expecting Waypoint REIT to pay a distribution of 15.7 cents per security, translating to a distribution yield of 6.3%.

Inghams Group Ltd (ASX: ING)

Inghams is one of the largest poultry businesses in Australia and New Zealand. It has national networks of processing and distribution facilities.

The board of Inghams recently decided to change its dividend payout ratio policy to be in a range of 60% to 80% of underlying net profit after tax (NPAT). That means that it might be more attractive for dividend investors.

In the ASX dividend share’s FY21 half-year result, poultry volume growth was 4%, with total revenue growth of 4.6% and total poultry revenue growth of 6.1%.

Underlying net profit after tax (NPAT) before AASB16 changes grew 10.7% to $46.5 million. The interim dividend was increased by 2.7% to 7.5 cents. Growth of profit allows for the sustainable growth of the dividend.

In terms of the company’s outlook, it said that it will continue to focus on the execution of its five-year strategy to deliver more consistent, predictable and reliable returns to shareholders.

Inghams said the net impact of lower feed prices is expected to be modest in the second half, given the recent surge in international demand and customer cost pass through mechanisms.

The broker Citi rates Inghams as a buy, though it pointed to the Woolworths Group Ltd (ASX: WOW) contract negotiation as a potential headwind. The price target is $4.40 and it expects Inghams to pay a grossed-up dividend yield of 6.2% in FY21.

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.

Click Here For Your Free Stock Report

Returns As of 15th February 2021

More reading

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

The post 2 bountiful ASX dividend shares rated as buys by brokers 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!