3 top ASX 200 dividend shares I think are bargain buys right now

Now is a great time to look at S&P/ASX 200 Index (ASX: XJO) dividend shares in my opinion, as some have been hit by volatility in 2022.

Higher interest rates hurt the valuations of riskier assets because they appear less appealing than a stronger income return from ‘safe’ government bonds or term deposits.

While share markets have been recovering in the last couple of months, I think there are still plenty of investment opportunities. Here’s why I think the ASX shares below could be bargains.

Centuria Industrial REIT (ASX: CIP)

This real estate investment trust (REIT) is the largest Australian pure-play ASX-listed industrial property owner.

Since the beginning of 2022, the Centuria Industrial REIT share price has dropped more than 23%, which has had the impact of boosting the potential distribution yield.

It’s expecting to pay a total distribution of 16 cents per unit in FY23, which translates into a forward distribution yield of around 15%.

The ASX property share recently said that its pro forma net tangible assets (NTA) per unit was $4.11 after valuations were done for 31 December 2022.

Centuria Industrial REIT’s share price is at a 22% discount to this figure, though I wouldn’t be surprised to see the NTA decline again a little in another six months.

Jesse Curtis, the Centuria Industrial REIT fund manager, said that rental growth was offsetting higher interest rates for the ASX 200 dividend share:

Occupier demand for industrial property remains strong with low vacancy and limited supply continuing to drive rental growth across industrial markets. While capitalisation rates have widened, this has been substantially offset by the value of Centuria Industrial REIT leasing success and growth in market rent with the portfolio value reducing modestly.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is a leading global healthcare pathology company. It has a large presence in several countries, including Australia, the United Kingdom, the United States and Germany.

The Sonic Healthcare share price is down 34% in the year to date, and it’s close to a 52-week low.

While COVID-19 testing has significantly reduced, the ASX healthcare share is still making quite a lot of money from the procedure – which I see as extra earnings. In October 2022, the company’s COVID-19 testing revenue amounted to $57.7 million. This money can be used to make acquisitions or increase shareholder returns, such as a share buyback.

The base business revenue – which excludes COVID testing – saw a 6.7% revenue growth in the first four months of FY23.

With a “progressive dividend policy”, the ASX 200 dividend share is projected to pay a grossed-up dividend yield of 4.7% in FY23, according to Commsec numbers.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is a leading electronics retailer with stores in Australia and New Zealand. The company also owns The Good Guys.

It’s logical to think people are less likely to buy new gadgets during a downturn. But, I believe items like smartphones and computers are unlikely to see a big decrease because of how integral they now are for communication, work, entertainment and education. So, the company’s sales could hold up quite well, in my opinion.

The JB Hi-Fi share price has sunk 20% since its peak in March 2022.

Trading continues to be strong for the ASX 200 dividend share. In the first quarter of FY23, sales for each of its divisions were up by at least 12%. And I think the business can continue to generate strong earnings and pay solid dividends in the coming period.

According to Commsec, JB Hi-Fi is projected to pay a grossed-up dividend yield of 8.5% in FY23.

The post 3 top ASX 200 dividend shares I think are bargain buys right now appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

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 recommended Jb Hi-Fi and Sonic Healthcare. 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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