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3 ASX dividend shares to buy in February 2021

man handing over wad of cash representing ASX retail capital return
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There are some ASX dividend shares that could be worth considering in February 2021.

Businesses that pay out some of their profit to investors each year may be able to generate a higher yield for income-seekers.

Here are three ASX dividend shares with yields of at least 3%:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that is run by Charter Hall Group (ASX: CHC). It aims to invest in high quality real estate assets that are predominately leased to corporate and government tenants on long term leases.

The ASX dividend share has 459 properties with a total value of $4.23 billion. Around 53% of the leases are triple net leases, which means tenants are responsible for things like rates, insurance, repairs and maintenance and land tax.

The REIT has an occupancy rate of 97.3% and a weighted average lease expiry (WALE) of 14.2 years.

It has major tenants that make up a lot of the rental income – Telstra Corporation Ltd (ASX: TLS) is responsible for 19%, government entities make up 16%, BP makes up 14% of the rental income and Woolworths Group Ltd (ASX: WOW) makes up 13%.

In terms of sector diversification, industrial properties make up 26%, long WALE retail is 29%, office is 24%, telco exchanges is 15% and agri-logistics is 6%.

Analysts at Macquarie Group Ltd (ASX: MQG) likes the guidance of at least 29.1 cents per share, with the REIT’s good yield, cashflow and certainty provided by strong tenant agreements.

Charter Hall Long WALE REIT has an expected yield of at least 6.3% using a payout ratio of 100%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX dividend share with the longest dividend growth record. The old investment conglomerate has grown its dividend every year since 2000.

The Soul Patts share price has fallen 8% over the past month, which has had the effect of pushing up the trailing dividend yield, which is now 3.1%.

It has a diversified portfolio which displays different defensive characteristics and continue to pay dividends despite the difficult operating conditions because of COVID-19. Some of the biggest dividend payers for Soul Patts from its portfolio are: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Soul Patts funds its own dividend from the investment income it receives. It also makes its own profit from private operating businesses like swimming schools, resources and agriculture.

If the ASX dividend share increases its annual dividend by 2 cents per share in FY21, at the current Soul Patts share price it has a forward grossed-up dividend yield of 3.2%.

APA Group (ASX: APA)

APA owns a large 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). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

After Soul Patts, APA is one of the next ASX dividend shares that has the longest consecutive growth streaks, it has been going up for around a decade and a half.

The energy infrastructure giant funds its dividend from growing operating cashflow, which is increasing as more of APA’s projects are finished. APA recently announced a pipeline in WA which could unlock further requests from miners for a connection for cheap and reliable energy.

At the current APA share price it offers a distribution yield of 5.3%.

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Returns As of 15th February 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, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. 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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