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 three of the shares that fit the bill:
National Australia Bank Ltd (ASX: NAB)
NAB is the only big four ASX bank to be currently rated as a buy. It’s trading cheaper than the other banks and new management could revitalise the business and take the necessary steps to address the issues raised in the Royal Commission.
The bank currently has a grossed-up dividend yield of 11.4%, which is far more than what you could get from a NAB term deposit in terms of income.
Scentre Group (ASX: SCG)
This is the real estate investment trust (REIT) that owns all of the Westfield buildings in Australia and New Zealand. It’s a truly high-quality portfolio of retail shopping centres in prime locations.
With its very high occupancy rate the REIT can slowly and steadily charge higher rents from its tenants, which is leading to slow and steady growth of the distribution.
It currently has a distribution yield of 5.4%.
Woodside Petroleum Limited (ASX: WPL)
Australia’s largest oil business is going through a pretty good spell at the moment with the relatively strong price of oil compared to a few years ago, leading to good dividend payments for shareholders.
Woodside currently has a grossed-up dividend yield of 8.2%.
All three of these businesses have attractive dividend yields, although each of them face their own challenges. Online shopping and shifting energy prices make me question the merit of an investment in Scentre Group and Woodside. NAB isn’t much better with the Royal Commission issues and falling house prices, but the current value could be compelling if Australia doesn’t have a recession in the near-term.
Want some more dividend ideas? You should read about these quality ASX dividend shares.
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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 National Australia Bank Limited. The Motley Fool Australia has recommended Scentre Group. 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.