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:
National Australia Bank Ltd (ASX: NAB)
The big four ASX bank offers a grossed-up dividend yield of 8.1%.
The improving conditions in the property market could give NAB a boost if lending increases and mortgage arrears decreases.
NAB in-particular has something different to offer investors compared to the other big banks because it has new management which may be able to turn it around.
However, all the financial risks of a bank still apply to NAB, even it seems safer today.
Woodside Petroleum Limited (ASX: WPL)
The oil business has a trailing grossed-up dividend yield of 7.9%.
A cyclical business can provide solid yields when the underlying commodity is at a decent price. Higher prices than the operational costs of production mean higher revenue falls to the bottom line.
The fallout from the Saudi Arabia attack could be a benefit to Woodside if oil prices stay higher for longer. The Woodside share price rose by 4.3% today.
New Hope Corporation Limited (ASX: NHC)
The coal miner has a trailing grossed-up dividend yield of 9.1%
The fall in the coal price has caused a heavy fall for the share price of New Hope, pushing up the trailing yield.
There is actually a case for coal over 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 from most markets around the world.
Foolish takeaway
Each of these businesses have merits as dividend shares. However, I'm not a fan of any of them due to their cyclical earnings and potentially unsafe dividends.
