Although the S&P/ASX 200 (INDEXASX: XJO) and the All Ordinaries (INDEXASX: XAO) indices cracked all-time highs in July, so far for August it's been a jarring jerk back to reality (thanks Donald). There is a silver lining in a falling share market though – the ability to pick up our favourite dividend paying shares at a discount. With the market placing an ever-higher premium on good quality dividend stocks in our low-rate environment, it is more important than ever to take advantage of a discount whenever we can.
Here are 2 quality ASX dividend payers that I think are looking cheap today.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
'Soul Patts' has been described as the Berkshire Hathaway of the ASX, which is a shower of praise if I ever heard one. While I wouldn't quite say that SOL shares have rewarded long-term shareholders as much as a good ol' BRK.A share has, at least it won't set us back a cool half mil to buy one today.
Soul Patts is an investment company with stakes in other high-quality ASX business like TPG Telecom Ltd (ASX: TPM). The company has paid a rising dividend every year since 2000, which is not something many other stocks can claim. SOL shares are looking quite cheap at the moment at $20.74 – a considerable discount to its 52-week high of $31.87.
Rio Tinto Ltd (ASX: RIO)
Rio shares have been smashed on the back of a falling iron ore price, falling over 13% in the last month. However, this is a fairly dramatic share price move that may be an overreaction – for one, we don't know what the iron ore price will be in a few months time. Another reason to love Rio is the company is flush with cash at the moment, recently announcing a special interim dividend of US$2.12 per share (equating to roughly a 6% yield on an annualised basis) that will close to new investors tomorrow when the stock goes ex-dividend. Rio has a solid history of nice dividends, so another one to keep an eye on!
Foolish takeaway
Both of these stocks are solid businesses that are trading at a discount to their 52-week highs. I like SOL shares a bit more at current prices due to a more predictable business model.
