Motley Fool Australia

3 ASX dividend shares rated as buys by brokers


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 names of shares that have quite high yields.

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 have pretty high dividend yields:

Growthpoint Properties Australia Ltd (ASX: GOZ) 

This is a real estate investment trust (REIT), it owns 58 properties in the industrial and office sectors, 69% of those properties are industrial.

Its biggest three tenants in terms of passing rent are Woolworths Group Ltd (ASX: WOW), the NSW police and Commonwealth Bank of Australia (ASX: CBA). These are high-quality tenants that are going to stick around for a long time to come.

It has a 98% occupancy rate and has a forecast FY20 distribution yield of 7.25% with a weighted average lease expiry (WALE) of almost five years. It has increased its distribution each year since 2010.

Spark New Zealand Ltd (ASX: SPK) 

Spark is a large telco player in New Zealand, it also offers digital services for customers.

It isn’t the type of business that’s going to generate lots of growth, but it has the capability to generate decent profit growth with its various offerings.

In the event of a lockdown Spark could be one of the least affected businesses because everyone will want to keep their internet on at home.

It currently offers a trailing dividend yield of 5.4%.  

APA Group (ASX: APA) 

APA Group owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). It owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

The energy business has continually invested in new energy projects which will help drive future cashflow higher. New projects are expected to come online in the coming years. 

It currently has a trailing distribution yield of 5.6%. This is pretty good when you consider that APA has increased its distribution every year for 15 years.

Foolish takeaway

All three businesses have a positive futures, but the current market fears are causing indiscriminate selling. Of the three, I’d probably choose APA Group because of the importance of its assets and its consistently reliable cashflow.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

Related Articles…

Latest posts by Tristan Harrison (see all)