With the market sell-off on Friday, there are a number of ASX dividend shares that could be worth considering for March.
When a dividend stock is sold down, it increases the yield on offer, assuming that dividend isn’t cut.
The two ASX dividend shares below all have relatively high dividend yields and may be able to boost income for investors:
Pacific Current Group Ltd (ASX: PAC)
This business is an investor in global fund managers. It tries to help them grow with capital and expertise. Pacific Current then benefits from the increase in funds under management (FUM) and management fees of the manager.
Broker Ord Minnett likes the business and has a share price target of $7.60.
It just reported its FY21 half-year result which showed that its FUM increased from $93 billion at June 2020 to $113 billion at December 2020.
Pacific said that there was strong investment performance, particularly among active equity managers. Whilst GQG attracted most of the inflows, the ASX dividend share said there was FUM growth across the portfolio.
Management fees increased 10%, or 16% in US dollar terms and expenses were lower by around 24%. However underlying net profit after tax (NPAT) declined 13.4% to $11.6 million because of lower performance fees and the strengthening of the Australian dollar compared to the US dollar. Had the exchange rate stayed the same, underlying net profit before tax would have been A$0.9 million higher than it was.
During the period it announced the investment into Astarte Capital Partners, which is a London-based alternative investment manager focused on private markets real asset strategies. Astarte’s model is that it provides anchor/seed capital, working capital and strategic support to operating experts and emerging investment managers to support growth. Pacific Partners will receive approximately 40% of the net income.
In terms of the dividend, Pacific Current declared an interim dividend of $0.10 per share, the same as last year, which represents a 44% dividend payout ratio. The ASX dividend share is still targeting a dividend payout ratio of 60% to 80% of earnings.
Ord Minnett thinks that Pacific could pay a FY21 dividend of $0.40 per share, which translates to a forward grossed-up dividend yield of almost 11% at the current Pacific Current share price.
Rural Funds Group (ASX: RFF)
Rural Funds is an agricultural landlord that owns a variety of different farm types including almonds, macadamias, vineyards, cattle and cropping (sugar and cotton).
The real estate investment trust (REIT) has a goal of growing the distribution by 4% per annum for investors.
It achieves this goal through two methods. The first is that it has built-in rental increases in its contracts, linked to either CPI or a fixed 2.5% annual increase, plus market reviews. The other way it grows is through productivity improvement investing at its farms, such as improved irrigation for crops or better water access for the cattle.
The ASX dividend share has a number of high quality, listed tenants such as Olam, JBS, Select Harvests Limited (ASX: SHV), Treasury wine Estates Ltd (ASX: TWE) and Australian Agricultural Company Ltd (ASX: AAC).
Rural Funds recently gave guidance of another 4% increase in the distribution for FY22. Based on that estimated payout of 11.73 cents per share, it has a FY22 distribution yield of 5% at the current Rural Funds share price.
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Returns As of 15th February 2021
Motley Fool contributor Tristan Harrison owns shares of PACCURRENT FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.