Experts have named some leading ASX dividend shares as buys.
A business isn't necessarily rated as a buy just because it pays a dividend. Analysts are judging whether they think the current valuation is attractive.
COVID-19 has shown that share prices can be very volatile. However, dividends are decided by the boards of companies, so they can be more consistent than share prices.
Here are two buy-rated ASX dividend shares that are expected to pay solid yields:
Coles Group Ltd (ASX: COL)
Coles is one of the biggest supermarket businesses in Australia, along with Woolworths Group Ltd (ASX: WOW).
It's currently rated as a buy by multiple brokers, including Morgans. The broker currently has a price target on the business of $19.70. That suggests a possible rise of the Coles share price of around 10% over the next year.
According to Morgans, in terms of the potential dividend, Coles has a forecast grossed-up dividend yield of 4.9% in FY22 and 5.1% in FY23.
Morgans expects Coles to generate 75 cents of earnings per share (EPS) in FY22. That means the Coles share price is valued at 24x FY22's estimated earnings.
In terms of the most recent trading update, Coles said that it experienced elevated supermarket sales in early January as the Omicron COVID-19 variant spread through the community. However, sales moderated later in the month.
The ASX dividend share is investing in a store renewal program, as well as continued investments in e-commerce and the Witron and Ocado transformation projects with its distribution centres.
Centuria Industrial REIT (ASX: CIP)
This is a real estate investment trust (REIT) focused on high-quality industrial properties.
It's currently rated as a buy by the broker Morgan Stanley with a price target of $4.35. That's around 10% higher than today's valuation.
The business has around 80 properties worth approximately $4 billion. About 90% of its portfolio is located on Australia's eastern seaboard.
Centuria Industrial REIT's property portfolio has a weighted average lease expiry (WALE) of 8.9 years, providing the business with long-term income visibility. Its portfolio occupancy was 99.2% on 31 December 2021.
It's experiencing a high level of income growth. In the first half of FY22, its average rental growth was 10% higher than prior passing rents.
The ASX dividend share has provided guidance of a distribution of 17.3 cents per unit for FY22. At the current Centuria Industrial REIT share price, that represents a distribution yield of 4.4%.
Centuria Industrial REIT is expecting to see further rental growth, the REIT's manager Jesse Curtis has recently said:
With demand for industrial space expected to remain elevated, thanks to customer shifts to e-commerce plus onshoring to maintain supply chain resilience, and with limited supply within urban infill markets, we expect to see industrial rents continue to rise.
