Brokers have named some interesting ASX dividend shares as buys. They could be leading options for income in the coming years.
Sometimes share prices can be quite volatile, but dividends may be able to offset some of the fear factor by paying a regular stream of income to investors.
With that in mind, here are two to consider, according to brokers:
Inghams Group Ltd (ASX: ING)
Inghams is one of the country’s largest poultry businesses, supplying a huge amount of chicken to Aussies every year.
The Inghams share price has seen some volatility in recent months as COVID impacts bite. Two of the main impacts have been a higher price of feed for the poultry and staff shortages due to COVID (and isolating).
However, the ASX dividend share noted that just over a month ago that changes to the isolation rules for close contacts in the food sector were assisting with the staff shortages. As operating conditions normalised, it was expecting production capacity to recover quickly to meet customer and consumer demand.
In terms of the dividend, Inghams aims to pay reliable dividends to shareholders, with a dividend payout ratio of between 60% to 80% of underlying net profit after tax (NPAT).
FY21 saw an annual dividend of 16.5 cents per share from the poultry company, reflecting a payout ratio of 70.8% of underlying net profit.
Citi is expecting Inghams to pay a grossed-up dividend yield of 6% in FY22 and 7.8% in FY23.
Centuria Capital Group (ASX: CNI)
Centuria is an investment manager with over $20 billion of assets under management (AUM). The business is centred around property funds management and investment bonds.
The business is rated as a buy by the broker Morgan Stanley, with a price target of $3.45. This offers upside of close to 20%.
This ASX dividend share recently announced its FY22 half-year result which showed a 16% increase of AUM growth. It also delivered a 73% rise in operating profit after tax to $56.7 million.
It’s expecting to deliver operating earnings per security (EPS) of 14.5 cents, which would be an increase of 20.8%. It has also provided guidance of a distribution of 11 cents per security. This income guidance translates into a yield of 3.75%.
Broker Morgan Stanley is wary of what effect the prospect of higher interest rates will have on the real estate sector and net flows. The broker likes that Centuria offers exposure to attractive ’emerging’ sectors like agriculture and healthcare.
The real estate business says it’s focused on generating long-term income and potential performance fees for investors.
The post 2 ASX dividend shares that brokers say are buys appeared first on The Motley Fool Australia.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. 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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