If you have room for some ASX 200 dividend shares in your income portfolio this month, then the two named below could be worth considering.
Brokers rate these shares very highly and are expecting some great yields from them in the near term. Here's what you need to know:
Santos Ltd (ASX: STO)
The team at Ord Minnett thinks that Santos could be an ASX 200 dividend share to buy next week. It is one of the largest energy producers in Australia.
The broker rates Santos highly due to its very positive free cash flow (FCF) outlook. It notes that this is being supported by its Pikka and Barossa LNG operations and believes it leaves Santos well-placed to return funds to shareholders. The broker said:
An estimated FCF yield of 20% once Pikka and Barossa LNG start producing, and rigorous control of how that extra cash is spent, implies to us that Santos will have plenty of room to return excess capital to shareholders either via an increased payout ratio or share buybacks. In our view, the medium-term prospects for Santos offer a compelling investment opportunity.
As for dividends, Ord Minnett is forecasting dividends per share of 41 cents in FY 2024 and then 44 cents in FY 2025. Based on the current Santos share price of $6.83, this would mean dividend yields of 6% and 6.4%, respectively.
Ord Minnett currently has a buy rating and $8.40 price target on the company's shares.
Transurban Group (ASX: TCL)
Another ASX 200 dividend share that is highly rated by analysts is Transurban.
It is a toll road operator with a portfolio of key roads across Australia and North America. Locally, this includes the CityLink toll road in Melbourne, the Cross City Tunnel in Sydney, and AirportlinkM7 in Brisbane.
Bell Potter is a big fan of the company and has it on its Australian equities panel. These are shares it believes offer attractive risk-adjusted returns over the long term.
The broker thinks Transurban is well-positioned in the current environment due to its inflation-linked revenue stream. In addition, it likes the company due to its significant growth pipeline, which should be supportive of dividend growth in the future. The broker said:
We believe the current inflationary environment is favourable for Transurban given its inflation-linked revenue stream with annual escalators. Moreover, TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience. The group's current pipeline of growth projects is $3.3 billion (TCL's share of total project cost) and further huge development opportunities are expected over the next few decades, supported by population and economic growth.
Bell Potter is forecasting a dividend yield of approximately 5.2% over the next 12 months.
