I’m buying ASX 200 dividend stocks ahead of the next bull market

The S&P/ASX 200 Index (ASX: XJO) has had a very pleasing week thus far. The ASX 200 put on another 0.47% today, lifting the Index back over 7,340 points. That puts the share market’s gains for April at a pleasing 2.1% as it currently stands.

However, the ASX 200 still has a long way to go before we get back up to the all-time highs we saw in August 2021. Back then, the ASX 200 was over 7,600 points, a good 3.8% away from the levels we see today.

The ASX 200 has never failed to exceed a previous all-time high in its very long history. So I’m looking at picking up some additional ASX 200 dividend stocks before the next bull market carries ASX shares to a new all-time high.

When it comes to dividend investing, the importance of paying the right price cannot be overstated.

The actual dividends that a company pays are only one half of the equation when it comes to dividend yield.

To illustrate, let’s look at a popular ASX 200 dividend stock in Commonwealth Bank of Australia (ASX: CBA).

When a company pays out a dividend, its management must decide on a dollar amount per share. For instance, CBA’s last dividend payment came to $2.10 in dividends per share.

But CBA shares currently have a dividend yield of 4.24%. To get to this, we divide CBA’s share price by its dividends per share to get a percentage figure.

If CBA shares were trading at half their current price, the dividend yield would double. Conversely, if Commonwealth Bank shares were to double tomorrow, their dividend yield would halve.

So you can see how important share price is when buying a dividend share.

Which ASX 200 dividend stocks am I looking to buy?

That’s why I’m keen to load up on as many dividend shares as possible before the next bull cycle.

Right now, I’m seeing a lot of value in the ASX 200 retail sector. For example, Harvey Norman Holdings Limited (ASX: HVN) currently has a fully franked dividend yield of more than 8.3%. JB Hi-Fi Ltd (ASX: JBH) is close behnd at 7.7%. And Adairs Ltd (ASX: ADH) is also looking hot with its dividend yield of 8.7%.

Westpac Banking Corp (ASX: WBC) is another ASX 200 dividend share I’m looking at. While its dividend yield isn’t quite as high as some of those retail shares, a fully franked 5.64% isn’t anything to turn one’s nose up at.

Getting a decent dividend yield isn’t easy. So I’m doing my best to find some income winners before ASX shares take another run at the sky.

The post I’m buying ASX 200 dividend stocks ahead of the next bull market appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• How reliable are the dividends from CBA shares?
• Could Westpac shares have ‘the greatest potential’ of all the ASX 200 bank stocks?
• I’m looking for once-in-a-decade opportunities in the stock market recovery
• It’s official, the ASX 200 big four banks are the world’s most capitalised. Should you buy?

Motley Fool contributor Sebastian Bowen has positions in Adairs. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs and Harvey Norman. The Motley Fool Australia has positions in and has recommended Adairs and Harvey Norman. The Motley Fool Australia has recommended Jb Hi-Fi and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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