These 2 leading ASX dividend shares have been rated as buys by brokers like property business Aventus Group (ASX:AVN).
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There are some leading ASX dividend shares that could be ideas to think about for income, according to some brokers.
It’s tricky to find good dividends right now because of how low the official interest rate is from the Reserve Bank of Australia (RBA).
These two ASX dividend shares could be ones to think about:
Aventus Group (ASX: AVN)
Aventus is Australia’s largest fully-integrated owner, manager and developer of large format retail centres. It has around 20 locations that are worth more approximately $2 billion.
National tenants represent more than 87% of the portfolio, so it has a high number of blue chip tenants which should provide good rental reliability.
COVID-19 caused some disruption, but (excluding Victoria) traffic was 8% higher than pre-COVID levels across the portfolio in the FY21 half-year result. Occupancy is sitting at 98.5% and cash collection was at 98%.
Aventus believes that its diversified tenant base is well-placed to benefit from the recent household shift to working, learning and entertaining from home.
The FY21 half-year result showed the net asset value (NAV) increased by 3.7% to $2.50 per security and funds from operations (FFO) – the net rental profit – increased by 6.5% to 10 cents per security. The half-year distribution was 8.2 cents per security.
Aventus’ balance sheet is in decent shape, with gearing sitting at 34%.
The property ASX dividend share is now expecting to generate FFO of at least 19 cents per security, which would be growth of at least 4%.
Aventus is currently rated as a buy by Morgans. The broker thinks that Aventus could pay a FY21 distribution of 17.4 cents. This would translate to a distribution yield of 6.1%.
APA Group (ASX: APA)
APA is an energy infrastructure giant that is currently rated as a buy by a few different brokers including Macquarie Group Ltd (ASX: MQG).
One of the main positives for APA, in the broker’s eyes, has been the final investment decision (FID) on expanding its east coast grid. APA has extended its contract with Origin Energy Ltd (ASX: ORG). Contract extensions are expected with Energy Australia and AGL Energy Ltd (ASX: AGL).
The gas transportation agreement with Origin Energy will start on 1 January 2023 and will support Origin’s energy needs in the southern markets, including winter peak demand and ahead of projected potential 2023 supply risks. Under this agreement, Origin could meet over half of NSW’s winter demand.
Total incremental revenue for the ASX dividend share over the initial three-year GTA is around $190 million, with the option of a further two-year extension.
APA reached the FID on the East Coast Grid expansion project due to strong customer demand for transportation capacity, combined with existing contracted positions and available capacity.
The expansion will be delivered in two stages, at a capital investment of around $270 million. It will increase winter peak capacity of the East Coast Grid by 25% through additional compression and associated works. The first stage of works is targeted for commissioning in the first quarter of the 2023 calendar year.
Macquarie estimated APA will pay a distribution of 51 cents per security in FY21. This translates to a distribution yield of 5.3%.
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Returns As of 15th February 2021
- 2 ASX dividend shares with generous yields
- 2 buy-rated ASX dividend shares for income investors
- APA (ASX:APA) share price falls despite expansion and new agreement
- Here’s why the Aventus (ASX:AVN) share price is on the rise
- 2 excellent ASX dividend shares with generous yields
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool Australia has recommended AVENTUS RE UNIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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