Got money to invest for income? Here are 3 ASX 200 dividend shares

There are some ASX 200 dividend shares that can provide a reasonably high level of dividend income. One pick is Brickworks Limited (ASX:BKW).
The post Got money to invest for income? Here are 3 ASX 200 dividend shares appeared first on The Motley Fool Australia. –

A money jar with label indicating ASXdividend shares

There are some S&P/ASX 200 Index (ASX: XJO) dividend shares that have consistent dividends and reasonably high yields.

It’s getting hard to generate any meaningful income from bank accounts with how low the Reserve Bank of Australia (RBA) has pushed the official interest rate.

Here are three ASX 200 dividend shares that have yields of approximately 3% or more:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX 200 dividend share with the longest streak of consecutively growing its dividend each year. It has increased its dividend every year since 2000.

The company is an investment conglomerate. That means it has a wide array of investments across different industries like telecommunications, building products, resources, financial services, listed investment companies (LICs), pharmacies, agriculture and swimming schools. Its largest investment is TPG Telecom Ltd (ASX: TPG).

Each year, Soul Patts receives dividends and distributions from its investment portfolio. Soul Patts pays for its expenses and then pays out a dividend from the net operating cashflow.

The ASX 200 dividend share regularly diversifies its portfolio. It recently invested in several agricultural assets and it was unsuccessful at trying to buy aged care provider Regis Healthcare Ltd (ASX: REG).

Soul Patts currently has a grossed-up dividend yield of around 3%.

Brickworks Limited (ASX: BKW)

Brickworks is another ASX 200 dividend share with a long dividend record.

It hasn’t cut its dividend for over 40 years. One of the main contributors to that record has been that it has held a large amount of Soul Patts shares (it currently owns around 40% of the investment conglomerate).

The Soul Patts shares provide Brickworks with a stable source of earnings and a steadily-growing dividend.

Brickworks also owns half of an industrial property trust alongside Goodman Group (ASX: GMG). This trust is building quality buildings on excess land that was previously owned by Brickworks. Two of the newest and largest projects are high tech warehouses for Amazon and Coles Group Ltd (ASX: COL). Once those warehouses are completed it’s expected to grow the gross assets of the trust above $3 billion and it rental distributions will grow by 25%.

The ASX 200 dividend share relies on just these two assets to fund its dividend.

At the current Brickworks share price it has a grossed-up dividend yield of 4.5%.

Bapcor Ltd (ASX: BAP)

Bapcor is the biggest automotive parts business across the Australasia region. It has various segments including trade (Burson), retail (Autobarn), mechanics (ABS and Midas), truck parts (Tuckline) and wholesale (Precision Automotive).

The ASX 200 dividend share has been steadily increasing its dividend over the past several years, including a 2.9% increase of the FY20 dividend to 17.5 cents per share.

Bapcor recently revealed that its FY21 first-half profit has been revving higher during these strange times. For the first five months of FY21 to the end of November 2020, revenue was up 26%. Net profit after tax (NPAT) benefited from lower expenses in areas like travel and other areas of discretionary spending, as well as lower interest rates and the contribution from Truckline which wasn’t part of Bapcor in the prior corresponding period.

In the first half of FY21, Bapcor thinks revenue will grow by 25% and net profit will rise by at least 50%.

Wilson Asset Management is one of the fund managers that likes Bapcor for its rebounding performance, its strong market position and its ability to potentially make more acquisitions with a strong balance sheet.

At the current Bapcor share price it has a grossed-up dividend yield of 3.2%.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Bapcor, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Got money to invest for income? Here are 3 ASX 200 dividend shares appeared first on The Motley Fool Australia.

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