2 ASX 200 shares that could be top buys for dividends

Premier Investments is one leading ASX 200 dividend share.

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These S&P/ASX 200 Index (ASX: XJO) shares offer attractive dividend yields for investors.

Businesses that have a relatively high dividend payout ratios and attractive valuations can have good yields on offer.

There are plenty of ASX 200 shares that pay dividends such as Westpac Banking Corp (ASX: WBC), Rio Tinto Limited (ASX: RIO) and Santos Ltd (ASX: STO).

However, these two income stocks could be particularly interesting for dividend investors:

man placing business card in pocket that says dividends signifying asx dividend shares

Image source: Getty Images

Premier Investments Limited (ASX: PMV)

Premier Investments is one of the leading ASX 200 shares involved in the retail industry. It has a number of apparel brands within its portfolio such as Just Jeans, Peter Alexander, Jay Jays, Dotti and Portmans. It also owns Smiggle, as well as sizeable investments in Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

In FY21, Premier Investments' board declared a final fully franked dividend of $0.46 per share (up 27.8%), taking the full year fully franked dividend to $0.80 per share (up 14.3%).

The trailing full year dividend of $0.80 per share, translates to a grossed-up dividend yield of 4.2%.

The ASX 200 dividend share experienced a large rise in profitability during FY21, which included strong online growth. FY21 retail global sales rose 18.7% to $1.4 billion with Peter Alexander sales rising 34.7% to $388.2 million. Overall online sales jumped 36.4% to $300.7 million. FY21 net profit rose 97.3% to $271.8 million.

Despite widespread lockdowns for many of its stores in the first 17 weeks of FY22, Premier Investments' sales were only down by 3.5% and had improved nicely from the update given in September 2021 when its FY22 was only a few weeks old.

According to Commsec, the Premier Investments share price is valued at 20x FY22's estimated earnings with a projected grossed-up dividend yield of 4.7%.

Dicker Data Ltd (ASX: DDR)

Dicker Data claims to be Australia's leading distributor of IT hardware, software, cloud and internet of things solutions for reseller partners. It helps business clients transition customers through technological change.

The IT business is benefiting in a number of areas, with strong growth since the onset of COVID as more businesses need cloud infrastructure and home office capabilities.

On top of that, the continuing global chip shortage and consequent supply constraints have contributed to an overall improvement in "margin quality". This is expected to continue for the foreseeable future.

Dicker Data is experiencing strong demand with a backlog of orders to fulfil and as supply improves, it's expecting to meet this demand in the final quarter of 2021.

The ASX 200 dividend share notes that the role of technology in business success continues to proliferate and the evolving hybrid and modern workforce becomes increasingly dependent on more intelligent, faster and collaborate tech solutions.

Cybersecurity is another area that Dicker Data can generate growing earnings from.

In the company's latest update for the nine months to September 2021, it reported that total revenue was up 16.1% to $1.72 billion and profit before tax had increased by 26% to $76.6 million.

The last 12 months of dividends amounts to a grossed-up dividend yield of 4%. According to Commsec, the Dicker Data share price is valued at 27x FY23's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended 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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