2 ASX 200 shares that could be top buys for dividends

Magellan is one ASX 200 dividend share that could pay large dividend yields.

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There are a number of S&P/ASX 200 Index (ASX: XJO) dividend shares that may be good options for income.

Businesses are not rated as a buy by analysts just because it pays a dividend. Analysts also want to look for ASX shares that are good value as well.

At the moment, these two ASX 200 dividend shares that are rated as buys:

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the largest fund managers on the ASX. It's currently rated as a buy by the broker Macquarie Group Ltd (ASX: MQG) with a price target of $38. The broker thinks that Magellan is looking good value because of its lower earnings multiple and its higher dividend yield.

In FY22, Macquarie thinks that Magellan is going to pay a total annual dividend of $2.27 per share. That translates to a partially franked dividend yield of 6.4%.

Whilst the latest funds under management (FUM) update was just one month, it shows a reversal of the recent trend of declines. Over the month of October 2021, Magellan experienced a FUM increase of $1.5 billion despite the strengthening of the Australian dollar against the US dollar.

The ASX 200 dividend share recently said at its annual general meeting (AGM) that away from its global equities franchise, it has around $30 billion of FUM across five areas: infrastructure, Australian equities (Airlie), ESG/sustainable, MFG Core Series and FuturePay.

The fund manager said that each of those segments are at a different stages of their development and each has "significant" growth opportunities. It said that each represents a differentiated offering and each addresses a particular need or helps solve a particular problem. Magellan is also confident about the potential growth of its external investments like Barrenjoey and Guzman y Gomez.

Centuria Industrial REIT (ASX: CIP)

This is a real estate investment trust (REIT) which looks to own a quality portfolio of industrial properties across Australia.

It's on the lookout for properties located in land constrained urban infill markets, where tenant demand outstrips the forecast supply.

Centuria Industrial REIT has been focused on properties that lend themselves to last-mile transport logistics and distribution tenant customers and benefit from "strong" tailwinds such as e-commerce adoption and supply chain onshoring.

For example, it recently announced it has acquired four industrial assets for a collective price of $129.4 million. The ASX 200 dividend share outlined that those four assets had an initial yield of 4% and the weighted average lease expiry (WALE) was 3.5 years.

The brokers at Macquarie Group Ltd (ASX: MQG) think that the REIT is a buy, after noting the recent acquisitions announcement.

Macquarie believes that Centuria Industrial REIT could pay a distribution of 17.3 cents per unit in FY22 and 18.7 cents per unit in FY23. That translates to forward distribution yields of 4.6% and 5% respectively.

In Centuria Industrial REIT's FY22 first quarter update, it reaffirmed its FY22 funds from operations (FFO) guidance of no less than 18.1 cents per unit and distribution guidance of 17.3 cents per unit.

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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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