There are a number of attractive ASX dividend shares that could be worth owning for income in a portfolio that’s looking for dividends.
One bonus with Australian dividend shares is that the yield can be boosted by franking credits.
The below two businesses have dividend yields of more than 4%:
Brickworks Limited (ASX: BKW)
Brickworks is an ASX dividend share with a grossed-up yield of 4.4%.
It has a few different divisions that help it generate profit. Brickworks has a large Australian building products division where it’s one of the leading suppliers in the country including bricks and paving, masonry and stone, roofing, specialised building systems and precast.
Some of the brand names include Austral Bricks, Austral Masonry, Austral Precast, Bristle Roofing and Pronto Panel.
The Australian building products division is currently going through a recovery period from COVID-19.
Brickworks also has an emerging US building products division after making a few acquisitions, including Glen Gery. After purchasing these businesses, Brickworks is already the market leader in the north east of the US. It’s looking to make these operations more efficient and profitable.
The ASX dividend share owns half of an industrial property trust along with Goodman Group (ASX: GMG). The idea is that Brickworks sells excess land into the trust and then Goodman prepares it for an industrial property to be built on it. Getting a high quality tenant is the goal. The trust is building two high-tech warehouses for Amazon and Coles Group Ltd (ASX: COL). On completion, it’s expected to increase the rental profit distributions from the trust to Brickworks by at least 25%.
The final integral part of Brickworks’ business is the holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. It owns around 40% of the investment conglomerate, which has a diversified portfolio and it’s steadily growing the dividend to Brickworks.
Brickworks only needs the cashflow from the property trust and Soul Patts to fund its own dividend, which hasn’t been cut in more than four decades.
Pacific Current Group Ltd (ASX: PAC)
Broker Ord Minnett likes Pacific Current – it rates it as a buy and has a share price target of $7.60.
In FY21 the broker is expecting Pacific Current to generate 55.2 cents of earnings per share (EPS), which means it’s valued at 10x FY21’s estimated earnings. It also expects an annual dividend of 40 cents per share, which translates to a grossed-up dividend yield of 10.5%.
This ASX dividend share invests in fund managers around the world – it helps them grow and benefits from the increase in funds under management (FUM) and management fees.
Pacific Current’s FY21 half-year result saw management fee revenues grow 10% and operating expenses decline 24%. There was widespread growth, led by fund manager GQG, resulting in a 23.9% FUM increase to $112.8 billion – this represents the total FUM of all boutiques as if they were 100% owned by Pacific Current. The non-Australian dollar denominated FUM saw a 40% increase from June to December.
It is strategic when adding investments and divesting poor-performing ones. It recently announced an agreement to buy a stake in Astarte, which is a London-based investment manager focused on private markets real asset strategies.
The half-year dividend of $0.10 per share represented a payout ratio of only 44% from the ASX dividend share, with a target payout ratio of 60% to 80% for the full year.