The ASX dividend shares in this article have been rated as strong buys by brokers. One of those income picks is APA Group (ASX:APA).
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There are some ASX dividend shares that a number of brokers like and have rated as ‘buys’
It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.
Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, 麦格里银行 (ASX: MQG) and UBS that provide different recommendations about shares.
With that in mind, these ASX dividend shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.
APA Group (ASX: APA)
APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.
This ASX dividend share is liked by brokers including Macquarie, UBS and Morgans.
Macquarie thinks that short-term gas demand is likely to mean that APA meets or beats the capex goal. Over the longer-term, things like green gas and hydrogen could be good growth areas for APA.
The infrastructure giant has increased its distribution for shareholders every year for a decade and a half, which is one of the longest records on the ASX.
As APA completes more projects, it’s able to grow its operating cashflow, which is what funds its annual distribution.
The latest large project that APA has planned is an investment of up to $460 million to construct a new 580km pipeline in Western Australia to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.
This project, called the Northern Goldfields Interconnect (NGI), is expected to be operational around the middle of the 2022 calendar year. APA said that this investments creates a platform for further growth for APA as more and more resources customers seek energy solutions, including renewables and battery storage underpinned by natural gas.
APA recently announced a 4.3% increase to its FY21 interim distribution, bringing the annualised distribution yield for the ASX dividend share at the current APA share price to 5.4%.
Charter Hall Long WALE REIT (ASX: CLW)
This ASX dividend share is liked by brokers such as Macquarie and Citi.
Citi believes that the rest of FY21 looks positive as the real estate investment trust (REIT) benefits from the $700 million of assets that it acquired in recent months.
This property landlord is operated by manager Charter Hall Group (ASX: CHC). There are various sectors and tenants represented by the REIT’s portfolio of 459 properties.
In terms of income generation, its largest tenants are: Telstra Corporation Ltd (ASX: TLS), Australian federal and state government entities, BP, Woolworths, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL) and David Jones.
It is invested across different sectors of property including telco exchanges, office, industrial and logistics, agri-logistics and long WALE retail. WALE stands for weighted average lease expiry.
This ASX dividend share was one of the few REITs to grow the distribution during 2020 despite COVID-19. In the recent FY21 half-year result it announced a 3.6% increase of the operating earnings per share (EPS) and distribution to 14.5% cents and net tangible assets (NTA) went up by 5.1% to $4.70 per unit.
Charter Hall Long WALE REIT reaffirmed its guidance that operating EPS will be at least 29.1 cents per unit this year, equating to a FY21 distribution yield of at least 6%.
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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 and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of APA Group, COLESGROUP DEF SET, and Woolworths Limited. 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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