It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.
If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.
Every so often MarketIndex collates the broker recommendations of 450 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is.
The below ideas have dividend yields above 5% and a market capitalisation above $1 billion. However, a high dividend yield can indicate a falling share price or limited growth prospects.
Here are two of the shares that fit the bill:
Boral Limited (ASX: BLD)
The construction company currently has a partially franked trailing dividend yield of 5.1%, which is partly due to its share price falling by 27% since the end of reporting season.
With a large construction boom going on in the US, Asia and Australia, Boral has plenty of opportunities to keep growing earnings for the next couple of years with its building & construction materials.
Boral is a pretty good dividend idea because it has grown its dividend each year since 2013. A dividend stock looks more attractive with a decent starting yield and continuing increases.
G8 Education Ltd (ASX: GEM)
The childcare business has seen its share price and dividend hit over the past year due to oversupply issues in the industry and therefore damaging G8 Education’s occupancy levels.
However, the company recently reported that occupancy levels are growing again whilst keeping a good handle on wages.
Its trailing annual dividend equates to a grossed-up dividend yield of 7.4% based on the current share price of $2.81.
Both of these shares offer attractive dividend yields considering how low interest rates are from term deposits.
They may be able to generate good total returns over the next 12 months, however I like to invest in shares I can see clear growth profit over at least the next five to ten years, which I’m not sure of with either company.
If I were investing for income I’d much rather go for one of these leading dividend shares with growing dividend payments.
NEW! The Motley Fool’s team of crack analysts has just released a timely report revealing the names and codes of their top 3 dividend share recommendations for 2019. Be among the first investors to get access—FREE, for a strictly limited time. You’ll discover the names of 3 hefty dividend paying companies with what our analysts consider to be solid growth prospects for the year ahead…
The first two offer fat, fully franked yields and the third is a surprising REIT offering you the chance to become a landlord with none of the hassle! If you’re looking for hot new ideas, look no further. But you do need to hurry. Snap up your free copy now, before supplies run out!
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Scott Phillips.