The ASX dividend stock segment of the market looks as attractive as ever to me.
The recent ASX stock market volatility has pushed down share prices slightly, which subsequently has improved the dividend yield on offer for investors.
With the official interest rate in Australia lower than at the start of the year, it could make even more sense to invest in ASX dividend stocks because of their superior yields compared to a savings account.
Which businesses are good buys amid a growing US trade war? I believe the two ideas below are good options.
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Charter Hall Long WALE REIT (ASX: CLW)
This is a diversified real estate investment trust (REIT) that owns various properties, including service stations, distribution centres, hotels, government-tenanted offices, telecommunication exchanges, data centres, retail, food manufacturing, Bunnings warehouses, waste and recycling facilities, and more.
I think diversification is a great strategy for lowering risks while also giving the business a wider investment universe to look for the best opportunities.
The one factor linking all these properties is that they're signed on for long-term leases, providing rental visibility and security for investors. At 31 December 2024, the business had a weighted average lease expiry (WALE) of 9.7% and a portfolio occupancy of 99.8%.
The business usually pays out all of its rental profit as a distribution. It's expecting to pay a distribution of 25 cents per unit in FY25, translating into a distribution yield of 6.6% from the ASX dividend stock.
Telstra Group Ltd (ASX: TLS)
Telstra is Australia's leading telecommunications business with significant spectrum assets, the widest network coverage, and the most subscribers.
The business has invested significantly to ensure it has the leading position in 5G, which is helping it continue winning more subscribers. In the first six months of FY25, Telstra reported that its mobile handheld users grew by 2.5%, and mobile income grew by 5%. Telstra's income grew by 0.9% to $11.8 billion, operating profit (EBITDA) rose by 6% to $4.2 billion, and net profit rose by 6.5% to $1 billion.
The profit growth enabled Telstra to grow its dividend per share by 5.6% to 9.5 cents. If it paid the same dividend in six months, it would have a grossed-up dividend yield of 6.5%, including franking credits.
Telecommunications and an internet connection will remain increasingly important for the foreseeable future, so Telstra seems like a solid pick in the current economic environment.
