Yields of up to 8%! Should I buy these ASX 200 dividend stocks in February?

Big dividends incoming! Here are three major dividend payers.

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Key points
  • Bendigo Bank is projected to benefit from rising interest rates, and could pay a yield of more than 8%
  • Telstra is cutting costs and growing revenue – it could pay a dividend yield of around 6%
  • Meantime, Centuria Industrial REIT might pay a distribution yield of close to 5%

The ASX share market has a wide range of S&P/ASX 200 Index (ASX: XJO) dividend stocks that are expected to pay impressive dividend yields over the coming 12 months and beyond.

Being able to pick an investment that has a juicy starting yield and expectations of long-term growth could make a really good combination.

While higher interest rates have made the investment picture more tricky, these three ASX dividend shares could continue to deliver powerful passive income and make excellent income investments.

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Bendigo and Adelaide Bank Ltd (ASX: BEN)

Bendigo Bank isn't as big as the major ASX bank shares, but it's still worth a few billion dollars.

The business could benefit from the higher interest rates because it's able to pass on interest rate hikes to borrowers more quickly than it does to savers. However, it's worth noting banks are coming under a bit of political pressure because of that.

Higher lending profits could lead to a higher Bendigo Bank share price and stronger dividends. That's at least until arrears start rising at banks, including Bendigo Bank.

In terms of how much dividend income the ASX 200 bank stock is predicted to pay, Commsec numbers suggest that Bendigo Bank is going to pay an annual dividend per share of 60 cents. This would translate into a grossed-up dividend yield of around 8.5%.

The estimates also put the Bendigo Bank share price at 11 times FY23's estimated earnings.

Telstra Group Ltd (ASX: TLS)

In my opinion, Telstra is the leading telco on the ASX. Its mobile network is often regarded as the best in the country, with more network coverage.

With the improvement of 5G over 4G, I think Telstra is in a good place to be able to, over time, replace the household NBN connection with 5G connections for wireless broadband. This could, in turn, boost Telstra's margins.

I think the fact it has implemented inflation-linked price increases for mobile users is a promising sign for revenue and profit growth.

With the ASX 200 dividend stock also working on cutting costs, Telstra's earnings per share (EPS) is expected to rise in the coming years.

In FY23, the ASX dividend stock could pay a grossed-up dividend yield of 5.9% according to Commsec.

Centuria Industrial REIT (ASX: CIP)

I think this real estate investment trust (REIT) is one of the best options in the sector.

Higher interest rates could have a double whammy on property-related businesses. They could hit the valuations of the properties themselves, while also leading to higher interest costs – one of the main costs for a REIT.

But, the Centuria Industrial REIT is the largest pure-play Australian industrial listed property business. The ASX 200 dividend stock is benefiting from very strong demand for well-placed logistics properties, driving up rental income. This growth in the rent is doing a good job of offsetting the increasing capitalisation rate of its properties.

In FY23, it's projected to pay a distribution of 16 cents per unit, according to Commsec. This translates into a forward distribution yield of 4.7%.

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. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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