Finding a decent dividend yield on the ASX is a difficult task these days, particularly if one is shopping for ASX 200 consumer staples shares.
ASX 200 consumer staples shares are often prized above others amongst income investors. That's because companies that sell goods that we need, rather than want, tend to be more resistant to economic problems like inflation and recessions, resulting in relatively reliable profits and thus dividends.
Popular ASX 200 consumer staples shares like Coles Group Ltd (ASX: COL), Bega Cheese Ltd (ASX: BGA), and Metcash Ltd (ASX: MTS) have all seen market-beating gains in recent months and years. Whilst this has been wonderful for existing investors, it has had the less-desirous effect of lowering the dividend yields investors can expect if they buy those shares today.
If a stock in this space hasn't seen galloping share price gains over the past 12 months, it's likely due to significant investor concerns over that business' fundamentals. A good example of this is Woolworths Group Ltd (ASX: WOW), which we dove into earlier this week. But today, let's check out another embattled consumer staples share in Endeavour Group Ltd (ASX: EDV).
Endeavour has indeed been through the wringer in recent years. Following its recently dropped full-year earnings report, the company hit a new post-IPO low of $3.66 a share just this week.
Endeavour investors have never really caught a break from this company, which today remains down almost 40% from the $6.10 share price it hit the market at back in mid-2021 following its spin-off from Woolworths.
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Is this ASX 200 consumer staples share a buy for income today?
However, Endeavour's share price woes have seemingly done wonders for this stock's dividend yield. At current pricing, this ASX 200 consumer staples share is now trading with a hefty yield of 3.37%.
So should income investors rush out and buy this stock as a result?
Unfortunately, it's difficult to find an ASX broker who thinks Endeavour is a compelling buying opportunity right now.
Last week, my Fool colleague went through the thoughts of broker Morgans. The broker downgraded Endeavour to a hold, albeit with a 12-month share price target of $4.15, following the company's earnings report. The broker cited a lack of long-term strategy and uncertainty regarding demand for Endeavour's products as key concerns.
It's not just Morgans though. We also recently looked at the views of fellow broker Bell Potter, who gave Endeavour a hold rating as well, and argued that increased competition from the Coles-owned Liquorland chain doesn't bode well for this ASX 200 consumer staples share's immediate future.
Analysts at Macquarie are even more bearish. This broker recently rated Endeavour shares at underperform and gave the company a share price target of just $3.60.
So, despite a rising dividend yield, it seems most ASX experts reckon investors should avoid this ASX 200 consumer staples share for the foreseeable future. Let's see if time proves them right.
