The Motley Fool

3 beaten down dividend shares in the bargain bin

In the last 12 months a number of quality dividend shares have fallen significantly.

Whilst this is no doubt disappointing for existing shareholders, I believe it has created an opportunity for the rest of us to snap up some bargains.

Three dividend shares which I think could be bargain buys today are listed below:

The Ardent Leisure Group (ASX: AAD) share price is down around 28% from its 52-week high of $2.97. This means that the entertainment company’s shares now provide a trailing unfranked 3.5% dividend. Whilst this isn’t the biggest yield on the market, I believe that the expansion of its Main Event business in the United States could put the company in a position to grow its earnings and dividend significantly in the future.

The Premier Investments Limited (ASX: PMV) share price has fallen 12% since this time last year. At the current share price this retailer’s shares provide a trailing fully franked 3.9% dividend. Much like Ardent Leisure, I expect this dividend to grow at a quick pace thanks to the expansion of its Smiggle brand overseas. By the end of calendar year 2019 management expects Smiggle to generate over $200 million in annual sales from the UK market alone. The brand recently delivered global half-year sales of $134.7 million.

The Telstra Corporation Ltd (ASX: TLS) share price has lost 17.5% of its value since this time last year. This means the telco giant’s shares now provide a trailing fully franked 7% dividend, which I think makes it one of the best dividends on the Australian share market. While there are concerns over increased competition, I believe cost-savings, its market-leading position, and exceptional network give it the edge of its rivals. I expect this to allow Telstra to grow earnings and its dividend at a steady rate for the foreseeable future.

Finally, this fourth dividend share is also in the bargain bin in my opinion.

Especially with its shares providing investors with a huge fully franked dividend.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Premier Investments Limited and Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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