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 ASX dividend shares that fit the bill:
Pendal Group Ltd (ASX: PDL)
Pendal has a trailing grossed-up dividend yield of 10%. Pendal generates a solid level of revenue every year from its management fees from the funds that it manages.
The last result was tough with how much performance fees the business didn’t generate in the March 2019 half-year compared to the prior corresponding period.
As people continue to grow wealthier, they’ll be looking for places to park their money and Pendel could be one of the beneficiaries. However falling markets can create a double whammy if Pendal’s funds naturally decrease and investors pull out their money.
Boral Limited (ASX: BLD)
Boral has a trailing partially franked dividend yield of 5%. The Australian construction sector is expected to go through a bit of rough spot over the next couple of years with approvals down and defaults rising.
However, Boral is a quite a high-quality business, it has a lot of operations outside of Australia and it’s creating other forms of long-term earnings, such as today’s partnership with Mirvac Group (ASX: MGR).
Star Entertainment Group Ltd (ASX: SGR)
The casino complex business has a trailing grossed-up dividend yield of 8.2%.
Although Star faces imminent competition in Sydney from Crown Resorts Ltd (ASX: CWN), Star is doing its own form of expansion in Queensland.
The recent earnings update was disappointing, but the lower share price rewards us with a higher trailing dividend yield.
Casinos and gambling have been popular for a very long time and I doubt that’s going to change any time soon.
All three of these shares are interesting dividend ideas. With how cyclical Pendal and Boral might be, I think Star would be my choice of the three today, its dividend has been steadily growing over the past few years.
These leading ASX dividend shares could be even better ideas than the ones the brokers chose.
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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 Crown Resorts 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 Scott Phillips.