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3 ASX dividend shares rated as strong buys by brokers

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There are some ASX dividend shares that a number of brokers like and have rated as ‘buys’

It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.

Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.  

With that in mind, these ASX dividend shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

Aurizon Holdings Ltd (ASX: AZJ)

Aurizon is Australia’s largest rail freight operator, moving coal, iron ore, agricultural freight and more across the nation.

The ASX dividend share is rated as a buy by at least three brokers.

Over the past year the Aurizon share price has fallen 29% and over the past two months the Aurizon share has dropped 11%. This has pushed the trailing partially franked dividend yield up to 7%. The total FY20 dividend was increased by 10% on the back of a 12% increase to underlying net profit after tax (NPAT).

However in FY21 the company is expecting group underlying earnings before interest and tax (EBIT) to be in the range of $830 million to $880 million, down from the $909 million EBIT generated in FY20.

For coal, the company is expecting flat coal volumes based on the current view of COVID-19 impact on steel demand.

Super Retail Group Ltd (ASX: SUL)

Super Retail is one of the largest retailers in Australia, it sells through brands like BCF, Supercheap Auto, Rebel and Macpac.

The ASX dividend share is liked by at least four brokers.

Super Retail recently gave a trading update which showed growth for the first half of its FY21.

For the 26-week period ending 26 December 2020, the company said that it achieved a record result with group sales growth of 23% and like-for-like sales growth of 24%. Online sales went up 87% to $327 million.

The Super Retail gross margin improved by 270 basis points, which supported higher EBIT margins across all four core brands.

Super Retail reported that its provisional segment underlying EBIT was $253 million to $256 million – this would equate to growth of 119% to 122%. It also said that provisional normalised net profit is going to be in a range of $174 million to $177 million, which would be growth of 135% to 139%. Statutory net profit is expected to be in a range of $170 million to $173 million, which would be growth of 196% to 201%.

Management are expecting to invest in its businesses in the second half of the year, with higher promotional activity and an aim to grow its market share.

Based on the trailing dividend and the current Super Retail share price, it has a grossed-up dividend yield of 6%.

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business. It has numerous building products such as bricks, paving, masonry, roofing and precast. Some of its largest brands include Austral Bricks, Austral Masonry, Austral Precast and Bristle Roofing.

The ASX dividend share is rated as a buy by at least four brokers.

The company is seeing a recovery in the Australia building products sector with the country seeing a turnaround after the painful COVID-19 effects in the first half of 2020.

Brickworks owns two large assets which supports its current (and growing) dividend. It owns around 40% of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which has a defensive and diversified portfolio to provide growing dividends to Brickworks.

The company also has an industrial property joint venture with Goodman Group (ASX: GMG) which seeks to maximise the excess land that Brickworks used to own by building good properties on prime real estate.

At the current Brickworks share price, it has a grossed-up dividend yield of 4.6%.

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 owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, Super Retail Group Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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