Plenty of S&P/ASX 200 Index (ASX: XJO) shares have the potential to pay investors attractive dividend yields over the next 12 months. This article is about two high-yielding ASX 200 dividend shares.
Analysts have had a guess at what the business is going to pay in dividends over the coming 12 months.
Investors for income may be interested to know about the below two high-yielding ASX 200 dividend shares:
Centuria Industrial REIT (ASX: CIP)
This is the Australia’s largest pure play industrial property real estate investment trust (REIT).
The business is currently rated as a buy by the broker Macquarie Group Ltd (ASX: MQG), which has a price target of $4.16 on the business. That suggests the analysts believe there’s still potential for a double digit capital increase over the next 12 months.
On Macquarie’s numbers, the ASX 200 dividend share is going to pay a distribution of 17.3 cents per unit in FY22 and 18.7 cents per unit in FY23. That translates into distribution yields of 4.6% and 5% respectively.
The aim of Centuria is to have a portfolio of high-quality industrial assets in key metro locations, underpinned by a quality and diverse tenant base.
It now has a portfolio of close to 80 properties worth more than $3.5 billion.
The fund manager, Jesse Curtis, said:
Centuria Industrial REIT continues to benefit from macro trends that increase demand for last mile industrial space within close proximity to large population catchments. Centuria Industrial REIT’s industrial portfolio is skewed towards these infill markets where increased tenant demand and limited supply opportunities is driving upward pressure on market rents.
Fortescue Metals Group Limited (ASX: FMG)
Fortescue is a large iron ore miners with multiple hubs in Western Australia, producing many millions of tonnes of iron ore.
In the first quarter of FY22, its iron ore shipments amounted to 45.6 million tonnes, which was up 3% year on year.
The broker Macquarie currently rates Fortescue as a buy, with a price target of $21. That’s a potential upside of over 20% over the next 12 months, if the broker is right.
Macquarie thinks that Fortescue could pay a dividend of $1.97 in FY22 and a dividend of $1.42 per share in FY23, which translates into grossed-up dividend yields of 16.5% and 11.9% respectively. The broker thought the quarterly update from the business was strong, aside from the lower iron ore price.
I’ve already mentioned the shipments from the quarterly update. Fortescue achieved a C1 cost of US$15.25 per wet metric (wmt), which was in line with the previous quarter. The business had net debt of US$175 million at 30 September 2021, which was after the US$4.7 billion payment of the FY21 final dividend and capital expenditure of US$744 million in the quarter.
Macquarie also notes the continuing development of Fortescue’s green credentials. Recent announcements includes a target to achieve net zero scope 3 emissions by 2040. Fortescue Future Industries has recently announced the development of a green energy and green hydrogen manufacturing industry in Gladstone, Queensland.
Based on Macquarie’s numbers, the Fortescue share price is valued at less than 10x FY23’s estimated earnings.
Should you invest $1,000 in Fortescue right now?
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Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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