2 high-yielding ASX 200 dividend shares

There are some S&P/ASX 200 Index (ASX:XJO) shares that have very high dividend yields and could be worth a look for income investors.

| More on:
A woman holds a tape measure against a wall painted with the word BIG, indicating a surge in gowth shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Some S&P/ASX 200 Index (ASX: XJO) shares are expected to pay a high dividend yield to investors in 2021.

A few ASX 200 dividend shares are still struggling in this COVID-19 environment such as Sydney Airport Holdings Pty Ltd (ASX: SYD).

But there are others that are paying solid payments that equate to a pretty high yield such as:

Waypoint REIT Ltd (ASX: WPR)

As the name suggests, Waypoint is a real estate investment trust (REIT) that owns a portfolio of service stations across Australia. The vast majority of them are leased as Coles Group Ltd (ASX: COL) Express convenience stores.

It has 470 properties with a weighted average lease expiry (WALE) of 10.8 years, with 72% of them in metro locations and the other 28% in regional locations.

The aim of the ASX 200 share is to steadily increase its distributable earnings per security (EPS). It has successfully done this in each of the year's since it listed on the ASX. In FY20 its distributable EPS grew another 4.25% with minimal impact from COVID-19 (99.9% of rent was collected).

It has an annual management expense ratio of 0.30%, which is one of the lowest in the REIT sector.

Waypoint is expecting to grow its distributable EPS by another 3.75% in FY21 to 15.72 cents. That would equate to a distribution yield of 6.3%.

The business is looking to offload non-core assets at a premium. It has sold three metro assets through public auction for a combined price of $8.1 million, which was a 22.1% premium to the prevailing book value.

Waypoint is rated as a buy by the broker Morgans, with a price target of $2.92. The broker points out that almost all of the leases have a fixed 3% or higher annual rental increase which helps distributable profit growth. 

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the ASX 200 shares that is seeing elevated levels of demand after the onset of the COVID-19 pandemic.

Earlier on during COVID-19, there was strong demand for products that enabled customers to work, learn and be entertained at home.

But the strong retail environment has continued for many months beyond the initial lockdowns with government stimulus, low interest rates and redirected household expenditure.

Credit Suisse rates the JB Hi-Fi share price as a buy, with a price target of $57.39. The broker was impressed by the high level of sales in the third quarter of FY21. Credit Suisse believes there's a lot of demand still in the economy.

The broker is expecting the ASX 200 share to pay a FY21 dividend yield of 8% thanks to the strong earnings growth.

JB Hi-Fi said that in the third quarter of FY21, it saw total sales growth of 10.4% for JB Hi-fi Australia, 16% total sales growth for JB-Hi New Zealand and 5.8% sales growth for The Good Guys.

It said trading in April was also pleasing. However, it did acknowledge that it's now cycling against elevated sales growth from last year, though it's continuing to see elevated customer demand and strong sales growth rates over a two-year period.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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.

More on Share Market News

Investor sitting in front of multiple screens watching share prices
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave the thumbs up to these ASX shares last week. Why are they bullish?

Read more »

Jessica Amir
Investing Strategies

6 ASX shares to buy and hold until the next leap year

These are the stocks to store in the portfolio until the next February 29 rolls around in 2028, according to…

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Share Market News

If I invest $10,000 in Qantas shares, how much passive income will I receive in 2024?

Here's what analysts are predicting from the airline operator.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Big returns could be on the cards according to analysts.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Value Investing

Looking for ASX value shares? Here's 1 I'd buy and 1 I'd avoid!

It's not an easy exercise to identify which stocks are undervalued and which ones are simply terrible. Here's an example…

Read more »

A young girl looks up and balances a pencil on her nose, while thinking about a decision she has to make.

Will I be buying Zip shares now the company has turned a profit?

Is now the right time to buy this BNPL stock -- or not?

Read more »

a man with hands in pockets and a serious look on his face stares out of an office window onto a landscape of highrise office buildings in an urban landscape

1 ASX dividend stock down 55% to buy right now

Here's why I think this beaten-up stock could be an opportunity.

Read more »

Three analysts look at tech options on a wall screen
Share Market News

Here's how the ASX 200 market sectors stacked up this week

ASX tech shares are on fire, leading the 11 market sectors for a third consecutive week.

Read more »