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:
Star Entertainment Group Ltd (ASX: SGR)
The casino business has a grossed-up dividend yield of 7.4%.
It didn’t have the strongest FY19, and the total dividend was the same as last year, but the company is making significant investments in New South Wales and Queensland which will hopefully boost earnings in the coming years.
I’m not sure what’s going to happen to the Sydney earnings when Crown Resorts Ltd (ASX: CWN) finishes Crown Sydney, but Queensland could be an exciting growth area for the company in the future.
New Hope Corporation Limited (ASX: NHC)
New Hope has a trailing dividend yield of 7.5%.
Coal is not exactly what you would think of as a growth industry these days. It’s certainly true that Western nations are dialling down coal use for alternatives, but Asian demand continues to rise, which is what could rescue the coal price over the medium-term.
It also helps that New Hope is one of the lowest costing coal producers, so it does have an advantage against peers.
Super Retail Group Ltd (ASX: SUL)
Super Retail has a grossed-up dividend yield of 7.6%.
It’s a retail business that operates a number of retail brands including Supercheap Auto, BCF and Rebel Sport. Despite some market commentators, such as me, thinking that retailers like Super Retail would have a difficult FY19, the company managed to grow revenue and profit at a solid rate.
Online sales growth remains solid and will probably be key for the longer-term, but for now shareholders can benefit from a large and growing dividend.
None of these three shares are the typical types of dividend shares I’d put in my portfolio for income, though each of them do have compelling positive points. At the current prices I’d probably go for Star Entertainment due to the significant amount of investing that it’s doing for future growth, and the lower share price.
But, for dividends I would much rather buy one of these top income stocks for growing payments.
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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. The Motley Fool Australia owns shares of Super Retail Group 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.