There are a lot of great dividend shares an investor could buy now for a good price. Many have been selling at low prices since the 23 March market rout. Furthermore, others have seen their share prices fall in the past week. Yet, there has been no fundamental change to any of these companies. In fact, some of them are in better shape now than they were at the start of the year. Following are 4 ASX shares I think currently represent great dividend buys to hold for the long term.
Fortescue Metals Group Limited (ASX: FMG)
I believe the current Fortescue share price is definitely a great opportunity to buy now. The iron ore miner saw its share price fall by 6.8% last week for no apparent reason. At this price, it is selling at a price-to-earnings (P/E) ratio of 7.8 and has a trailing 12 month dividend yield of 10.74%. I think this is an absolute steal.
Fortescue is pressing ahead with the development of two high grade iron ore mines due to come in over the next 18 to 24 months. The iron ore market is struggling to keep up with Chinese demand and re-entry of Brazilian miner, Vale, or any new iron ore mines in Africa, should not dent demand for Fortescue ore.
Centuria Office REIT (ASX: COF)
The Centuria Capital Group (ASX: CNI) manages a number of great real estate investment trusts (REITs). Nevertheless, I think the Centuria Office REIT is the best one to buy now. This is Australia’s largest pure-play office REIT. During FY20, in the middle of the pandemic, the company managed to increase funds from operation by 39.5%, while maintaining an occupancy rate of 98.1%.
Commercial office real estate is protected by a relatively long weighted average lease expiry (WALE). For example, Centuria Office REIT has a WALE of 4.7 years. In addition, many of this REIT’s tenants are government departments. The REIT is selling at a P/E of 12.6 and pays a trailing 12 month dividend yield of 8.44%. Another company I think is an absolute bargain.
2 investment companies to buy now
With a market capitalisation of $1.5 billion, WAM Capital Limited (ASX: WAM) has a deserved reputation as one of the country’s leading capital managers. During FY20, the company still outperformed the All Ordinaries Index (ASX: XAO) by 4.4% whilst delivering a full year loss of $47 million due to cratering in investment values in a very volatile market.
WAM Capital executed a rapid sell off in less liquid small caps during the COVID-19 crash. Nonetheless, it later returned to take advantage of mispricing opportunities with companies like Temple & Webster Group Ltd (ASX: TPW), City Chic Collective Ltd (ASX: CCX), and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH). It is currently expanding its value via a takeover.
If you you were planning to buy now, WAM Capital has a trailing 12 month dividend yield of 7.24% after declaring full year dividends of 15.5 cents. I believe the repositioning of the portfolio, in reaction to the pandemic, places the company in a great position to benefit from the move to online shopping.
Pendal Group Ltd (ASX: PDL) is another investment company on the ASX, though not strictly a listed investment company (LIC). With a large array of managed funds, the company delivered a 21% reduction in statutory net profit after tax of $54.8 million. I think this is an exemplary result given the volatility caused by COVID-19.
At the time of writing, Pendal Group has a P/E of 12.08, which I consider to be a good ratio, and a trailing 12 month dividend of 7.4%.
Daryl Mather owns shares of Coffey International Limited and Fortescue Metals Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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.
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