When it comes to dividend shares there are countless options for investors to choose from on the ASX. Which certainly is fortunate with rates going down to record lows.

But with so many to choose from, it can be hard to decide which ones to buy.

To narrow things down I have picked out three dividend shares that brokers think investors should buy:

Aventus Group (ASX: AVN)

According to a note out of Goldman Sachs, its analysts have upgraded this retail property company’s shares to a buy rating with a $2.46 price target. The broker believes Aventus is well positioned to prosper as Australia gradually re-opens. This is due to its large format retail portfolio being weighted towards everyday needs and homewares, electrical, furniture, bedding and hardware. Everyday needs account for 38% of rental income, whereas the others make up the balance. In light of this, it has forecast Aventus paying a ~17.3 cents per unit distribution in FY 2021. This equates to a forward ~8.7% distribution yield.

Rio Tinto Limited (ASX: RIO)

Analysts at Morgans have retained their add rating and lifted the price target on this mining giant’s shares to $105.00. According to the note, the broker believes iron ore prices could surge higher from here due to supply disruptions. It doesn’t believe this is being reflected in its share price. In addition to this, the broker believes Rio Tinto will return significant funds back to shareholders again through dividends. So much so, it estimates that its shares are offering a fully franked ~9% FY 2021 dividend yield at present.

Service Stream Limited (ASX: SSM)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this essential network services company’s shares to $2.88. According to the note, the broker wasn’t overly surprised that Service Stream’s guidance for FY 2020 fell short of its estimates. It believes these delays were caused by clients not wanting to disrupt connections in both utility and telecommunications while people work from home. Macquarie expects this to be a temporary headwind and remains upbeat on the future. It is forecasting a fully franked dividend of 8.4 cents per share in FY 2021. This means a yield of almost 4.2%.

More reading

• ASX 200 drops 1% on Friday
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• ASX 200 drops 0.4%, Chinese threat to Australian iron
• Why the share price of this top dividend share just sank 6%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT and Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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S&P/ASX 200 Index (ASX: XJO) growth shares are a great way to grow your wealth faster than the broader share market in my opinion.

It’s the shares that are increasing their revenue and profit at a fast pace that can compound with solid results. ASX 200 growth shares can be big enough to be able to get through this coronavirus period, whilst being small enough to still have plenty of growth potential.  

Here are three ASX 200 growth shares I’d love to buy for my portfolio:

A2 Milk Company Ltd (ASX: A2M)

I think A2 Milk Company is one of the best shares on the ASX. It has good profit margins, a quality group of products and a very large total addressable market.

The fact that it’s expanding in both China and the US is right compelling for future profit growth. The current crisis is not dampening A2 Milk’s growth. Indeed it actually seems to be accelerating growth with some customers stocking up on product. I think it’s attractive that A2 Milk can target an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 30% while still growing so fast.

Another reason why A2 Milk is one of the best ASX 200 growth shares is its large cash balance which means it would have plenty of liquidity to survive even if it wasn’t still earning growing profit.

Xero Limited (ASX: XRO)

I believe Xero is another of the best growth ideas out there. The cloud accounting business has been growing its total subscribers at a fast rate since it first listed on the ASX. Those new subscribers come with a high gross profit margin and pay a pleasing monthly amount to Xero.

The current coronavirus crisis is starting to cause some issues for the ASX 200 growth share. Don’t forget that Xero’s clients are small and medium businesses.

But as long as Xero can keep growing total global subscribers over the longer term then there’s still a lot to like about Xero. It’s now starting to make a net profit and it’s also generating positive free cash flow.

Pro Medicus Ltd (ASX: PME)

Pro Medicus is another of the best on the ASX. It has a global, high-quality client base signed on with multi-year agreements.

The ASX 200 growth share also has no debt with a growing cash balance. There are plenty of growth levers that Pro Medicus can pull. It has a very high earnings before interest and tax (EBIT) margin of 50.2%. With such a high profit margin, a lot of the new revenue just falls straight to the bottom line.

A fast growing dividend is also another bonus.

Foolish takeaway

All three of these ASX 200 growth shares are great businesses worthy of being in any portfolio. The problem is buying them at a good price. I don’t want to overpay for these shares. The prices we saw in March 2020 for Pro Medicus was good enough to buy, but not right now. At the moment I’d probably say A2 Milk is the best buy, particularly as it’s about to expand into Canada.

More reading

• Have $500 to invest? Then buy these 5 ASX 200 shares immediately
• 3 explosive ASX growth shares to buy
• How to reduce your work to part-time using ASX shares
• 3 top ASX growth shares that could smash the market in the 2020s
• 3 shares I’d buy if the coronavirus selloff gets worse

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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