Category: Stock Market

I regularly invest in ASX dividend shares for my portfolio because they offer the potential for appealing passive income and capital growth.

Businesses that are growing earnings or increasing their underlying value can raise their payouts for shareholders.

Here are two S&P/ASX 300 Index (ASX: XKO) shares that have built an impressive history of paying reliable dividends while investing in long-term growth within their businesses.

Rural Funds Group (ASX: RFF)

This real estate investment trust (REIT) owns various types of farmland, including almonds, macadamias, cattle, vineyards and cropping.

Since starting to pay a distribution in 2014, the business has grown or maintained its distribution each year. In the longer term, it aims to grow its distribution by 4% per annum.

Rural Funds invests in its farms to make them more productive and valuable to tenants. One key project currently is transforming some cropping farms into macadamia farms, which are expected to generate more rent as capital is deployed.

Rural Funds is benefiting from some lease contracts with rental growth linked to inflation, which has been elevated in the last couple of years. A significant portion of its remaining rent has fixed annual rental increases.

The passive income machine pays its distribution quarterly — currently an annualised amount of 5.8%. The Rural Funds share price is trading at a 34% discount to its stated adjusted net asset value (NAV) at 31 December 2023.

Brickworks Limited (ASX: BKW)

I have invested in Brickworks shares multiple times over the past year, including recently, due to the compelling assets it owns.

Brickworks is the largest brickmaker in Australia. It also manufactures stone and masonry, roofing, cement, timber battens, and other products.

The ASX dividend share has a 50% stake in a large and growing industrial property trust that is steadily building and completing massive logistics warehouses on excess land Brickworks owned solely before it was sold to the trust.

There is a large demand for industrial properties as companies look to onshore more of their supply networks. The growth of e-commerce is also a good tailwind for warehouse demand, which is driving the rental and capital value of these properties.

Brickworks also owns around a quarter of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Soul Patts is an investment house that owns a diversified portfolio of defensive assets, which is growing its dividend and the underlying portfolio value over the long term.

The Soul Patts investment provides stability to Brickworks’ earnings during a downturn in Australian demand for building products.

The rental distributions from Brickworks’ property investment and the dividends from Soul Patts are enough to fund the Brickworks dividend.

Brickworks has grown its passive income payment yearly since 2014 and hasn’t cut its dividend for almost 50 years. The ASX dividend share currently has a grossed-up dividend yield of 3.5%.

The post Why I keep loading up on these 2 ASX passive income machines appeared first on The Motley Fool Australia.

More reading

• Top ASX stock to buy as a thrifty investor (the old Warren Buffett way)
• 4 ASX income stocks to buy for 4% to 8% dividend yields
• 2 cheap ASX 200 shares I’d buy in May
• 2 cheap ASX dividend shares I’d buy for income
• Here are 3 reliable ASX shares I’d buy instead of the big four banks right now

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you on the hunt for some big dividend yields? If you are, then read on.

That’s because the three ASX dividend shares listed below have been named as buys and tipped to offer yields of 6%+.

Here’s what you need to know about them:

APA Group (ASX: APA)

APA Group owns and operates energy infrastructure assets and businesses, including energy infrastructure, comprising gas transmission, gas storage and processing, and gas-fired and renewable energy power generation businesses.

These businesses have been generating growing income over the last couple of decades. This has allowed the company to consistently increase its dividend for almost 20 years.

The good news is that this trend is expected to continue in the coming years. For example, Macquarie expects an increase to 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.74, this equates to 6.4% and 6.6% dividend yields, respectively.

Macquarie has an outperform rating and $9.40 price target on its shares.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Another ASX dividend share that could provide income investors with big dividend yields is Dalrymple Bay Infrastructure. As its name implies, it is the long-term operator of the Dalrymple Bay Coal Terminal in Queensland.

Analysts at Morgans are feeling positive about Dalrymple Bay Infrastructure’s outlook and believe the company is well-placed to pay some big dividends. They are forecasting dividends per share of 22 cents in FY 2024 and then 22.9 cents in FY 2024. Based on the latest Dalrymple Bay Infrastructure share price of $2.97, this will mean very generous yields of 7.4% and 7.7%, respectively.

Morgans has an add rating and $3.05 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Morgans is also a big fan of HomeCo Daily Needs and sees it as an ASX dividend share to buy.

It is a property company that invests predominately in metro-located, convenience based assets, across the target sub-sectors of neighbourhood retail, large format retail, and health and services.

Morgans likes the company due to its resilient cashflows. It also sees it as a beneficiary of accelerating click and collect trends.

As for dividends, the broker is forecasting dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.25, this will mean yields of 6.4% and 7.2%, respectively.

Morgans has an add rating and $1.37 price target on its shares.

The post These ASX dividend shares offer 6%+ yields right now appeared first on The Motley Fool Australia.

More reading

• Buy these ASX shares and get 6% and 7% dividend yields
• Morgans says these ASX dividend shares are top buys
• 4 ASX income stocks to buy for 4% to 8% dividend yields
• Looking to retire? Buy these ASX dividend shares for passive income
• 2 high-yield ASX dividend shares to buy as they bounce

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group and Macquarie Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’re wanting to build a strong portfolio, then having a few blue chip ASX 200 shares in there could be a good idea.

They can make a good foundation to build from due to their strong and established business models, experienced management teams, and robust cash flows.

But which blue chips could be buys for investors right now? Four that analysts are positive on are listed below. Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

Analysts at Bell Potter think that Coles could be a blue chip ASX 200 share to buys. It is of course one of the big two supermarket operators in the Australian market. In addition, Coles has a sprawling liquor store network across brands such as First Choice and Liquorland.

Bell Potter believes the company is well-positioned for growth thanks to the benefits of immigration and its supply chain improvements. In light of this, the broker recently named Coles on its favoured list with a buy rating and $19.00 price target on its shares.

Flight Centre Travel Group Ltd (ASX: FLT)

Another ASX 200 blue chip share that has been given the thumbs up by analysts is Flight Centre. It is a travel agent giant with operations across the world.

The team at Morgans is feeling very positive about the company’s outlook. It notes that “FLT has the greatest risk, reward profile of our travel stocks under coverage.

The broker has add rating and $27.27 price target on its shares.

Qantas Airways Limited (ASX: QAN)

Analysts at Goldman Sachs thinks that this airline operator’s shares are great value at current levels. In fact, its analysts highlight that they “believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity.”

The broker currently has a buy rating and $8.05 price target on the Flying Kangaroo’s shares.

Treasury Wine Estates Ltd (ASX: TWE)

Finally, the team at UBS thinks that Treasury Wine could be an ASX 200 blue chip share to buy right now. It is the wine giant behind brands such as Penfolds, DAOU Vineyards, 19 Crimes, Lindeman’s, and Blossom Hill.

UBS thinks the company’s shares are undervalued currently. Especially now that China has just removed its tariffs from Australian wine. It believes this larger market opportunity means that its shares deserve to trade on higher multiples.

As a result, the broker has put a buy rating and $15.25 price target on them.

The post 4 super ASX 200 blue chip shares to buy appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Here’s the Coles share price I would buy at
• How much could a $10,000 investment in Qantas shares be worth in 12 months?
• Broker says these ASX dividend shares are top buys
• 5 ASX 200 blue chip shares to buy now

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Flight Centre Travel Group and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Paying $80 for a $100 note… sounds too good to be true. Yet, that’s essentially how Warren Buffett made market-beating returns early in his investing career. Do these opportunities still exist among Australian companies? I believe so… and I’ve found what could be the top ASX stock to buy for this ‘deep value’ approach.

The $788 million company is a candidate for the legendary billionaire’s old investment strategy, but it also might be an improvement. While most of Buffett’s picks under this approach were good for a quick buck, this S&P/ASX All Ordinaries Index (ASX: XAO) company could have long-term legs.

Warren Buffett’s highly profitable, old-school strategy

You might be wondering… what is the investing strategy that the co-founder of Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) used to apply—and if it were so good, why is it the old Warren way? Wouldn’t the great Buffett still be putting it to work?

Well, the approach is referred to as ‘cigar butt investing’. It’s a value investing strategy at its core. You want to find a company that has been discarded — like a cigar butt — that still has more puffs of smoke in it. In other words, the company still has more value than investors give it credit for.

Looking at a business’s book value is a simple way to identify companies that may fall into this category.

In a worst-case scenario, a business can be liquidated, selling its assets to erase debts and provide any leftover case to investors. A company’s book value can roughly estimate its liquidation value. A price-to-book (P/B) ratio below 1 might indicate that there’s some value to be realised.

How profitable was this way of investing for Buffett? Take a look for yourself at the returns under the Buffett Partnership compared to the Dow Jones below:

Year	Buffett Partnership	Dow Jones
1957	10.4%	-8.4%
1958	40.9%	38.5%
1959	25.9%	20.0%
1960	22.8%	-6.2%
1961	45.9%	22.4%
1962	13.9%	-7.6%
1963	38.7%	20.6%
1964	27.8%	18.7%
1965	47.2%	14.2%
1966	20.4%	-15.6%
1967	35.9%	19.0%
1968	58.8%	7.7%

The Oracle from Omaha closed down this fund after 1968. Buffett later justified this by saying the fund had become too large to find cigar butt investing stocks big enough to move the needle at its size. However, that shouldn’t be an issue for people like you and me — unless you’ve won the lotto…

ASX stock to buy with plenty of puff

Rural Funds Group (ASX: RFF) is a perfect candidate for cigar butt investing. The Australian real estate investment trust (REIT) owns a mix of agricultural assets across the country and trades on a P/B ratio of 0.7 times book value.

As I said, this company is valued at nearly $790 million. Yet Rural Funds Group holds $1.045 billion in net assets when you subtract the liabilities. In my opinion, this suggests a straightforward path to a 32% upside for this ASX stock.

It’s not without its risks. The value of its properties can fluctuate depending on weather conditions, natural disasters, and leasing arrangements. However, land is in high demand and short supply. As such, I’m confident land prices are more likely to appreciate than depreciate.

Lastly, I think this top ASX stock to buy is better than a traditional cigar butt pick because of one key reason…

Buffett was looking for one puff to boost a company’s share price before offloading. In contrast, I believe Rural Funds Group could be the cigar that keeps on giving in the long run. Developing and managing land for various intensive activities is critical. Rural Funds has the know-how and capital to keep acquiring land and adding value.

The post Top ASX stock to buy as a thrifty investor (the old Warren Buffett way) appeared first on The Motley Fool Australia.

More reading

• 4 ASX income stocks to buy for 4% to 8% dividend yields
• 2 cheap ASX dividend shares I’d buy for income
• Here are 3 reliable ASX shares I’d buy instead of the big four banks right now
• 3 ASX shares that look way too cheap to ignore right now
• Why I think this ASX 300 stock is a fantastic pick for dividend income

Motley Fool contributor Mitchell Lawler 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

More reading

• Beaten-up ASX 200 stock surges 12% on buyout rumour
• Why Australian Ethical, Cromwell Property, Smartpay, and Xero shares are surging
• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• Why these 4 ASX 200 shares just got downgraded by top brokers
• Xero share price leaps 8% on staggering earnings upheaval

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Reliance Worldwide and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Aub Group, Challenger, Collins Foods, Sonic Healthcare, and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’re wanting a passive income boost, then it could be worth checking out the ASX dividend stocks listed below.

All three have been named as buys and tipped to provide investors with attractive dividend yields in the coming years.

Here’s what you need to know about these dividend stocks:

Dexus Convenience Retail REIT (ASX: DXC)

The first ASX dividend stock that could be in the buy zone is Dexus Convenience Retail REIT. It owns a portfolio of service station and convenience retail assets located across Australia and concentrated on the eastern seaboard.

Morgans is positive on the company and has put an add rating and $3.23 price target on its shares.

As for dividends, the broker is expecting its shares to provide income investors with some very big yields in the coming years. It has pencilled in dividends per share of 21 cents in both FY 2024 and FY 2025. Based on its current share price of $2.69, this equates to yields of 7.8%.

Transurban Group (ASX: TCL)

A second ASX dividend stock that could be in the buy zone according to analysts is Transurban. It is a toll road operator with a high quality portfolio of roads across Australia and North America.

Citi believes that Transurban could be a top option for income investors right now and sees scope for some strong returns over the next 12 months. The broker currently has a buy rating and $15.60 price target on its shares.

As for income, Citi is expecting dividends per share of 63 cents in FY 2024 and 65 cents in FY 2025. Based on the current Transurban share price of $13.46, this will mean yields of 4.7% and 4.8%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend stock that analysts think could be a buy is Universal Store. It is the youth fashion retailer behind the Universal Store, Perfect Stranger, Thrills, and Worship brands.

Morgans is also a fan of the company. It highlights that “UNI’s focus on offering high quality, fashionable apparel in a well presented store environment with high levels of service is paying off.”

The broker has an add rating and $6.50 price target on its shares.

As for dividends, Morgans is expecting fully franked dividends per share of 26 cents in FY 2024 and 29 cents in FY 2025. Based on the current Universal Store share price of $5.00, this will mean yields of 5.2% and 5.8%, respectively.

The post Buy these ASX dividend stocks for passive income appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 ASX 200 blue chip shares to buy now
• Buy these ASX dividend stocks for a passive income boost
• Morgans says these ASX stocks can rise 20% (and pay big dividends!)
• Forget term deposits and buy these ASX dividend shares

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. 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 Scott Phillips.

Investors have pummelled ASX 200 stock Fletcher Building Ltd (ASX: FBU) over FY24, but the building materials company shot the lights out today.

The Fletcher Building share price hit an intraday high of $3.06, up 12.5% on yesterday’s closing price. It retraced some of its gains to close the session at $2.96, up 8.82%.

However, even with today’s gains included, the ASX 200 stock is down a whopping 35.7% over the past 12 months.

The stock was the second-biggest mover among ASX 200 shares behind Xero Ltd (ASX: XRO) today.

What pushed Fletcher Building shares higher on Thursday?

The share price gain follows a report in The Australian that US-based global investment firm Platinum Equity may be interested in buying the New Zealand-based company, which also has operations here.

The Australian reported that Gresham Advisory Partners, Platinum’s financial advisor, is investigating a buyout of all or parts of the Fletcher Building business.

Platinum describes itself as an “alternative asset management firm that invests institutional capital from around the globe”.

It owns 50 companies and specialises in private equity buyouts and investing in the private and public debt of underperforming and undervalued companies.

Platinum already owns other building materials companies. They include Cabinetworks Group, the largest independently owned manufacturer and distributor of kitchen and bathroom cabinets in the United States.

Last year, Platinum also bought the Australasia windows, doors and building products business of JELD-WEN Holding, Inc. (NYSE: JELD) for approximately US$461 million.

ASX 200 stock tumbles 36% in 12 months

As you can see from the chart below, Fletcher Building has had a rough 12 months.

In 2024, the ASX 200 stock has suffered two hefty share price tumbles.

The first was an 8.65% fall on 14 February, when the company emerged from a trading halt and released its 1H FY24 report.

Fletcher Building revealed a net loss after tax of NZ$120 million compared to a net profit after tax (NPAT) of $92 million in 1H FY23. The dividend was suspended.

The company issued FY24 Group EBIT guidance in the range of $540 million to $640 million. It said the mid-point assumed a continuation of materially weaker market conditions for the rest of FY24.

The company said market weakness was especially apparent in the New Zealand residential sector where volumes had declined 20%.

Management also said it would sell its Australian Tradelink business after deciding that “further ownership of the business is not in line with the strategic objectives of Fletcher Building.”

This followed a full review of the business and a $122 million non-cash impairment and write-down in Tradelink’s carrying value.

The company also announced that its CEO, Ross Taylor, had decided to retire and its chair, Bruce Hassall, would be standing down.

The next significant fall for the ASX 200 stock was on 13 May, when the company released a disappointing trading update and downgraded guidance.

The company said it expected to fall short of its EBIT (before significant items) guidance of NZ$540 million to NZ$640 million and now expected EBIT in the range of NZ$500 million to NZ$530 million.

The post Beaten-up ASX 200 stock surges 12% on buyout rumour appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• These 2 ASX shares could win big time in the long term
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

National Australia Bank Ltd (ASX: NAB) shares had a tough time on Thursday.

The big four bank’s shares ended the day over 1% lower at $34.40.

Why did NAB shares fall?

This weakness appears to have been driven by a broker note out of Goldman Sachs this morning.

According to the note, its analysts have been looking over the banking sector following the release of updates this month. Commenting on the updates, the broker said:

1H24 reported PPOP/cash earnings were -8%/-9% on pcp but resulted in small upgrades to our FY24E cash EPS forecasts. Four key earnings themes suggested the deterioration in bank fundamentals may be slowing: i) commercial lending pipelines are strong, ii) mortgage NIM headwinds are finding a base and deposits spreads have held up, iii) there were some signs of deteriorating asset quality but it remains better than long-run averages and asset values to support losses (and potentially provision releases), and iv) strong capital positions saw A$2.4 bn of additional capital to be distributed to shareholders versus our pre-result forecasts.

While there clearly were some positives, the broker highlights that fundamentals are weak and valuations are extreme. It adds:

Bank 12-m forward PERs are currently at the 99th percentile, our DCF valuations are 17% below current share prices, and the spread between bank fully-franked yields and the 10-year bond yield is currently at its lowest level in nearly 15 years. While bank PER relative to non-bank industrials remains c. 5% cheaper than the historic average, we think this underestimates the relative deterioration in fundamentals.

In fact, the broker warns that the banks are “close to record expensive.” It adds:

To this end, a simple model that assesses bank relative to non-bank industrial fundamentals (EPS growth, ROE and franking) is currently at the third percentile and so when we adjust relative PERs for this, banks are trading at close to record expensive, i.e. 93rd percentile.

NAB downgraded

In light of the above, the broker has taken its buy rating off NAB shares and downgraded them to neutral with an unchanged price target of $34.04. This is a touch lower than where its shares are currently trading. It commented:

NAB is trading on a 12-mo forward PER of 15.4x, at the 95th percentile versus a 15-year history, and the 15-year average of 12.2x. 2. With the exception of CBA, NAB trades well above its 15-year average versus each of its peers on a 12-mo forward PER basis.

The post Why did NAB shares just get downgraded? appeared first on The Motley Fool Australia.

More reading

• What’s the dividend yield of NAB shares right now?
• Here’s what Wilsons is saying about ANZ, CBA, NAB, and Westpac shares
• An ASX dividend giant I’d buy over NAB shares for 2024
• It was huge week for ASX 200 bank shares. Here’s why
• How much passive income would I make from 200 NAB shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

Many income-seeking investors may be focused on individual ASX dividend shares. ASX-listed exchange-traded funds (ETFs) could be a useful addition to a portfolio.

An ETF’s dividend yield is dictated by the payments from their underlying holdings. If the businesses inside the ETF collectively have good dividend yields, then the ETF’s yield should also be appealing too.

There aren’t many ASX ETFs paying dividend yields above 5%, but below are four that do have relatively high yields.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The concept of this fund is that it provides low-cost exposure to companies on the ASX with higher forecast dividend yields than other ASX shares.

Diversification is achieved by restricting the proportion invested in any one industry to 40% of the total ETF and 10% in any one company.

It has a total of 71 holdings, with significant positions in companies like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES) and Westpac Banking Corp (ASX: WBC). It gives a lot of exposure to the ASX’s blue-chip shares.

According to the latest Vanguard monthly update, the VHY ETF has an annual management fee of 0.25% and a grossed-up dividend yield of 6.5%.

Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)

This fund owns 20 of the largest ASX blue-chip shares, providing quarterly income to investors. It also employs a ‘covered call‘ strategy to enhance dividend income and “partly offset potential losses in falling markets” according to Betashares.

Four companies in the YMAX ETF portfolio have a weighting of at least 7%: BHP (15.4%), CBA (13.6%), CSL Ltd (ASX: CSL) (9.5%), and NAB (7.4%).

This fund has a higher management fee of 0.76% than the VHY ETF, though it also has an even higher grossed-up dividend yield of 9.8%.

Betashares Martin Currie Equity Income Fund (ASX: EINC)

This ASX ETF invests in an actively managed portfolio focused on ASX shares with good income attributes. It aims to provide a stronger dividend yield than the S&P/ASX 200 Index (ASX: XJO) and grow income faster than the rate of inflation.

The fund, managed by Martin Currie, selects “quality Australian companies paying attractive income, and with the potential for long-term income growth.”

It currently has names like APA Group (ASX: APA), Medibank Private Ltd (ASX: MPL), Telstra Group Ltd (ASX: TLS) and Atlas Arteria Group (ASX: ALX) in the portfolio.

Australian Bank Senior Floating Rate Bond ETF (ASX: QPON)

This ASX ETF invests in a portfolio of some of the largest and most liquid senior floating rate bonds issued by ASX bank shares. In other words, it invests in some of the safest bonds Aussie banks have issued, with their yield linked to interest rates.

If the RBA interest rate increases, the income yield rises. However, if the RBA interest rate falls, so does the income payment.

The income is paid monthly and, according to Betashares, is “expected to exceed the income paid on cash and short-dated term deposits.”

The biggest eight bond positions all have a weighting of more than 8%, and those large positions are bonds from ANZ, Westpac, NAB and CBA.

According to BetaShares, the current ‘all-in’ yield is 5.1%. This ETF has an annual management fee of 0.22%.

The post 4 ASX ETFs with yields over 5% appeared first on The Motley Fool Australia.

More reading

• Buy these 4 ASX ETFs for income, growth, or mining exposure
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• Where I’d invest $10,000 in dividend stocks
• Buy these excellent ASX ETFs for your income portfolio in May

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 positions in and has recommended CSL and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended CSL and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With approximately $7.9 billion in assets under management, the iShares S&P 500 ETF (ASX: IVV) is arguably one of the most popular exchange-traded funds (ETFs) on the ASX. It’s certainly one of the most popular international index funds that track shares outside the ASX.

One of the perks of an ASX-based index fund, though, is the dividend income potential it can provide. Even if an ASX-based ETF isn’t geared to provide high levels of dividend payments specifically, most ASX shares fork out relatively high levels of income, not to mention those valuable franking credits.

As such, even investors who opt for a vanilla ASX index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) can expect to receive an annual dividend yield of between 3-5%. That would also come with some franking credits attached too.

But in stark contrast, US shares are famous for their lack of dividends. Many of the largest companies in the US markets don’t even pay a dividend. That includes the likes of Amazon, Alphabet and Berkshire Hathaway.

Indeed, Facebook-owner Meta Platforms made waves earlier this year when it declared its first-ever dividend. Yep, despite its near-US$1.2 trillion market capitalisation, Meta’s maiden dividend came in 2024.

So what kind of divided income can one expect from the iShares S&P 500 ETF?

Does the IVV ETF pay a decent ASX dividend?

Well, this ETF does pay its investors dividend distributions. In fact, those investors enjoy quarterly payments every three months from their IVV units – an unusual thing on the ASX.

Over the past 12 months, the iShares S&P 500 ETF has doled out a total of approximately 66 cents per unit.

That’s a little more than what investors bagged over the preceding 12 months.

At the current ASX IVV unit price of $53.73 (at the time of writing), these distributions give the fund a trailing dividend yield of… 1.23%. Given this ETF holds no ASX shares, its dividend distributions do not come with franking credits attached.

So yes, the IVV ETF does pay an ASX dividend. It just might not be on the scale that most ASX investors would be accustomed to.

Saying that, ASX investors who have held this ETF for a long time arguably don’t have many reasons to complain. What this ETF lacks in dividend firepower, it has certainly made up for when it comes to recent capital growth.

As of 30 April, IVV units have returned an average of 14.17% (growth plus dividends) per annum over the past three years. Over the past five years, investors have enjoyed a 14.69% average annual return, which stretches to 16.24% over the past ten years.

The post Does the iShares S&P 500 ETF (IVV) pay a decent ASX dividend? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Berkshire Hathaway, Meta Platforms, and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Berkshire Hathaway, Meta Platforms, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Berkshire Hathaway, Meta Platforms, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.