2 ASX 200 shares that could be reliable picks for dividends

These two S&P/ASX 200 Index (ASX:XJO) shares could be the right picks for future income, including Premier Investments Limited (ASX:PMV).

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There are some S&P/ASX 200 Index (ASX: XJO) shares that could be the right picks for income.

The below two businesses are amongst the market leaders in the country and have long-term growth plans to try to grow profit, whilst also paying dividends:

Premier Investments Limited (ASX: PMV)

Premier Investments operates a number of retail brands. Names like Smiggle, Peter Alexander, Just Jeans and Jay Jays are some of the names it runs. It also has a large investment in Breville Group Ltd (ASX: BRG).

The business has seen a lot of online and profit margin growth, which is what is driving the bottom line. In the first six months of FY21, global like for like sales went up 18.2% with the retail gross margin increased 286 basis points. Online sales surged 61.3%.

Retail earnings before interest and tax (EBIT) grew 88.5% to $237.8 million, with the EBIT margin increasing 1,308 basis points.

The business is focused on its profitability. The accelerated swing in customer preference to shopping online has meant that management are looking at each store's profitability. It has closed around 50 stores over the last 12 months, showing that the company is willing to walk away from stores with high rents that deliver unprofitable sales. The business has been able to reduce its rent to sales ratio by 318 basis points to 12.7% of sales.

The ASX 200 share believes that Smiggle is a powerful global brand set to rebound and grow from the COVID-19 impacts as children return to school and stores open.

At the current Premier Investments share price, it has a projected grossed-up dividend yield of 4.3% according to Commsec.

Cleanaway Waste Management Ltd (ASX: CWY)

Cleanaway describes itself as Australia's leading total waste management, industrial and environmental services company.

It has over 6,000 staff and over 5,000 specialist vehicles spread across more than 260 locations.

The business has been steadily growing its dividend over the past five years, including through the difficult COVID-19 year.

Cleanaway believes it has a positive future with a growing footprint of prized infrastructure assets that are making a sustainable future possible.

The business says that market growth is being driven by the emergence of energy from waste, increased resource recovery and value chain extension supported by rising levies and government policy.

The ASX 200 share recently announced an acquisition from Suez Australia, a portfolio of strategic post collection assets in Sydney. Those assets comprise two landfills and five transfer stations. They will be acquired for $501 million. It's expected that these landfills will have more than 15 years of available airspace.

The brokers at Macquarie Group Ltd (ASX: MQG) rate Cleanaway as a buy with a price target of $3. The broker likes the long runway that Cleanaway has from the circular economy trend.

According to Macquarie, the Cleanaway share price is valued at 32x FY21's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Premier Investments Limited. 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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