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 150 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:
Nine Entertainment Co Holdings Ltd (ASX: NEC)
Nine is the only dividend share rated as a ‘strong buy’, the other two were rated as buys. It has a trailing grossed-up dividend yield of 7.9%.
The company may be best known for its TV channels, but there are plenty of other things to get excited about Nine for including its ownership of Stan and the Australian Financial Review.
It’s unlikely to grow significantly, but it has a range of very useful media assets which will keep generating cashflow for a long time.
Star Entertainment Group Ltd (ASX: SGR)
One of the most important nationalities for Australia’s casinos are the Chinese. As I’m sure you’ve seen, China has gone into lockdown with flights between Australia and China to be cancelled for at least a few weeks.
The Star share price has fallen over 12% since 17 January 2020, causing the trailing grossed-up dividend yield to improve to 7.1%.
Star is currently investing heavily in both Sydney and Queensland to grow earnings in the future.
Super Retail Group Ltd (ASX: SUL)
The retailer behind the chains of Rebel, BCF, Macpac and Supercheap Auto has seen its share price drop by 10% since 15 January 2020.
Bushfire worries and the coronavirus have pushed the grossed-up dividend yield to 9.6%.
The company continues to see revenue growth, which should be very useful for driving profit growth higher over the longer-term. Population growth and inflation alone should see the company do reasonably well over the next five years as a dividend share.
All three shares are interesting picks. For longer-term growth I’d probably go for Star because media and retail are two tough industries to compete in these days, plus the coronavirus has given us a beaten down share price.
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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 Nine Entertainment Co. Holdings 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.