There are a handful of S&P/ASX 200 Index (ASX: XJO) shares that offer investors fairly high dividend yields.
Not every business is going to pay a large dividend. But a combination of a high payout ratio and satisfactory valuation means the below ASX 200 dividend shares offer juicy yields:
Growthpoint Properties Australia Ltd (ASX: GOZ)
This real estate investment trust (REIT) invests in properties, namely in the industrial and office properties across Australia. Not only does the REIT look to meet tenant needs now and in the future, but it also looks to operate in a sustainable way whilst reducing the impact on the environment.
Growthpoint has a total property portfolio value of around $4.3 billion, with a weighted average lease expiry (WALE) of 6.2 years, which provides a relatively long-term outlook for rental income.
It’s currently rated as a buy by the broker Credit Suisse. The broker expects Growthpoint will pay a distribution of 20 cents per unit in FY21, which equates to a distribution yield of 5.7%. This is also what management have guided.
The ASX 200 dividend share has a weighted average capitalisation rate of 5.5%, with a portfolio occupancy of 95%.
Growthpoint managed to generate 0.8% funds from operation (FFO) – rental profit – per security growth to 12.7 cents, with an increase of the net tangible assets (NTA) per security of 4.7% to $3.82. That means the current share price is at an 8% discount to the NTA.
Its gearing reduced to 29.9% in the recent result, well below the target range of 35% to 45%.
In FY21, Growthpoint is expecting to generate FFO per security of between 25.2 cents to 25.5 cents.
Magellan Financial Group Ltd (ASX: MFG)
Magellan is a fund manager that’s currently rated as a buy by the broker Morgans, with a price target of $58.26.
The manager’s key equity strategy has been struggling and underperforming the global benchmark in recent months. However, that could reverse with the US tech share’s strength in recent days and weeks.
Despite those difficulties, Magellan managed to report a 9% increase in its half-year average funds under management (FUM) to $100.9 billion. This led to an 8% rise in profit before tax and performance fees of the funds management business to $256.2 million, whilst net profit after tax (NPAT) grew 3% to $202.3 million.
The ASX 200 dividend share declared a 5% increase of the interim dividend to 97.1 cents per share.
Magellan CEO Brett Cairns noted a number of things that the company has done:
Magellan had a busy first half with the completion of a number of important initiatives including the restructure of our global equities retail funds, the launch of the Magellan Sustainable Fund and the MFG Core Series and principal investments we made in Barrenjoey Capital Partners, FinClear Holdings Limited and Guzman y Gomez.
Morgans is expecting Magellan to pay a dividend of $2.06 per share in FY21, which equates to a partially franked dividend yield of 4.3%.
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Returns As of 15th February 2021
Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia has no position in any of the stocks mentioned. 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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