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:
New Hope Corporation Limited (ASX: NHC)
The coal miner has a trailing grossed-up dividend yield of 9.3% after the share price plunge earlier in the year.
Most of the decline is justified with a fall in the coal price, but the best time to buy commodity shares are at the bottom of the cycle, which could be now. There is actually a case for coal for the medium-term with growing demand from Asia, but it’s clear over the ultra-long-term that coal will see a decline in demand.
Super Retail Group Ltd (ASX: SUL)
The retailer business has a grossed-up dividend yield of 8%. The 2019 calendar year has been volatile as investors struggle with what the retail industry is worth in this uncertain economic period.
Despite that, the operator of BCF, Macpac, Rebel and Supercheap Auto continues to see revenue and profit growth and if that can continue then the dividend could be a solid option too.
Aventus Group (ASX: AVN)
Property business Aventus has a distribution yield of 6.5%.
The real estate investment trust (REIT) sector has been a strong performer as interest rates fall and the Aventus share price has gone up 19% this year.
I’m not sure about the long-term future of the value of large retail properties, even if they do offer attractive yields today.
All three aren’t the typical ideas that I’d go for dividends, but they are certainly options. Of the three I’d go for Super Retail because it would appear to me to have the most flexibility.
However, I’d much rather buy these top ASX shares for dividends for the long-term.
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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 Super Retail Group Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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.