Some S&P/ASX 200 Index (ASX: XJO) shares are real dividend income beasts in my opinion, with a history of paying good dividends and a desire to grow the payment to shareholders.
A business from any industry can make a profit, but what they decide to do with that profit can make a big difference to investors. Some of these names pay investors excellent dividend yields, making them attractive for passive income investors.
One of the most useful things about a fall in the share price is that it boosts the prospective dividend yield, which is exactly what's happening with the below names.
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Centuria Industrial REIT (ASX: CIP)
This is a real estate investment trust (REIT) that describes itself as Australia's largest domestic pure-play industrial REIT.
The industrial properties are spread across metropolitan locations throughout Australia and are underpinned by a "quality and diverse tenant base".
The ASX 200 share aims to provide investors with income and an opportunity for capital growth. At the end of the FY23 half-year period, it had 88 industrial assets worth $3.9 billion, according to Centuria.
Its leasing statistics are strong – it had a weighted average lease expiry (WALE) of 8.1 years, with a high portfolio occupancy of 98.7%. According to Centuria sources, the Australian industrial vacancy rates are among the lowest in the world, at just 0.6%. This can support "strong market rent growth".
Increased interest rates could put pressure on its rental profits, but rental growth is helping offset this. Property values could fall, but the Centuria Industrial REIT share price is down around 20% in the last year, which could account for any future property valuation declines.
Its guided FY23 payout of 16 cents per unit amounts to a distribution yield of 5.1%, making it a dividend income beast in my eyes.
Pinnacle Investment Management Group Ltd (ASX: PNI)
Pinnacle identifies and works with high-performing fund managers to help them grow their own investment businesses.
The ASX 200 share takes a substantial stake and can help the fund manager with services like distribution and client services, compliance, finance, legal, technology, seed funds under management (FUM) and working capital, enabling the fund manager to focus more on the investing side of things.
The calendar year of 2022 was tough for the business and the underlying fund managers as asset markets declined. But, with interest rate rises seemingly (almost) coming to an end in the US and Australia, this could be a positive for FUM and investors willing to put more to work with one of Pinnacle's partners.
The company has also been investing to help fund its next 'horizon' of growth. The benefits could be seen over the next few years.
Does it count as a dividend income beast? I think so, if we look ahead to FY25 with projections on Commsec – when the share market recovery may have well and truly started – Pinnacle shares could pay a grossed-up dividend yield of around 7%. It's valued at just 16 times FY25's estimated earnings.
