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If you’re wanting to boost your income with some dividend shares, then you may want to consider Adairs Ltd (ASX: ADH).

It could be one of the best dividend shares to buy right now, according to analysts at Morgans.

Why Adairs?

Adairs is one of Australia’s leading furniture and homewares retailers thanks to its growing portfolio of brands – Adairs, Focus on Furniture, and Mocka.

It’s fair to say that FY 2022 has been a disappointing year so far due to COVID impacts, which have reduced store trading hours and store visits materially due to lockdowns and Omicron concerns.

However, the company is being tipped to bounce back swiftly by the team at Morgans.

It said: “Demand for ADH’s homewares is showing no sign of underlying weakness. The business has faced multiple challenges in recent months (many of which are in common with other retailers, but some are unique to ADH), but we think the investor should look to what comes next.”

Coming next are its belief that the Focus business will start improving store economics, the new national distribution centre will be delivering efficiencies, and the Mocka business will make its first steps towards an omni-channel strategy.

Morgans added: “These factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple.”

In light of this, it will come as no surprise to learn that the broker has an add rating and $3.50 price target on the retailer’s shares. Based on the current Adairs share price of $2.90, this implies potential upside of over 20%.

In addition, Morgans is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. This equates to very attractive yields of 6.5% and 9%, respectively, for investors over the next two financial years.

The post Analyst tips 20% upside and 6.5% dividend yield for this ASX share appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend with attractive yields that brokers rate as buys
• What’s the outlook for ASX retail shares like Kogan (ASX:KGN)?
• 2 compelling ASX shares that could be buys in March 2022
• Own ASX dividend shares? Here are some of the payouts that have surprised so far this earnings season
• ‘Significant’ COVID-19-related disruptions: Adairs (ASX:ADH) share price sinks 5% following horror first-half results

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. owns and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week in the red. The benchmark index fell 0.6% to 7,110.8 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to start the week on a positive note despite a poor finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.4% higher this morning. On Wall Street, the Dow Jones fell 0.5%, the S&P 500 dropped 0.8%, and the Nasdaq tumbled 1.7%.

Oil prices rise again

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a great start to the week after oil prices surged higher again. According to Bloomberg, the WTI crude oil price jumped 7.5% to US$115.68 a barrel and the Brent crude oil price rose 6.9% to US$118.11 a barrel. Supply concerns are supporting prices.

ASX 200 quarterly rebalance

After the market close on Friday, S&P Dow Jones Indices announced changes to the ASX 200 at the next rebalance. These changes will see Mesoblast limited (ASX: MSB), SKYCITY Entertainment Group Limited (ASX: SKC), Spark New Zealand Ltd (ASX: SPK), and Unibail-Rodamco-Westfield (ASX: URW) dumped out of the index on 22 March.

Gold price up again

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a good start to the week after the gold price pushed higher on Friday night. According to CNBC, the spot gold price rose 1.6% to US$1,966.6 an ounce. The gold price added 4.1% over the week thanks to increased demand for safe haven assets.

Blackmores downgraded to sell

The Blackmores Limited (ASX: BKL) share price could come under pressure today. This follows news that Goldman Sachs has downgraded the health supplements company’s shares to a sell rating with a $75.20 price target. The broker believes that the need for reinvestment will suppress the company’s near-term earnings.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Playing limbo… Magellan (ASX:MFG) share price hits 7-year low
• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores Limited. 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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If you’re wanting to add some ASX 200 dividend shares to your portfolio, then it could be worth considering the two giants listed below.

Here’s why analysts think they could be top options for income investors in March:

Commonwealth Bank of Australia (ASX: CBA)

The first ASX 200 dividend share to consider is Australia’s largest bank, Commonwealth Bank. It could be a top option due to its leadership position in the sector and the improving outlook for interest rates in Australia.

Bell Potter certainly thinks it would be a good option. And while its shares are trading at a premium to the rest of the big four, its analysts believe they deserve to and have put a buy rating with a $108.00 price target on them.

The broker commented: “Despite the misgivings of the market and especially COVID-19’s Omicron strain, CBA sees FY22 as a strong year. The unemployment (and underemployment rate) are the lowest since 2008 and Australian household accumulated savings are stronger than ever (likewise the rate at which wage growth in anticipated). Inflation is likely to increase in due course (and that’s a good thing for all banks) while non-mining investment including infrastructure continue to hold up reasonably well. The bank has again bounced back from its lows and is on its way back to its usual top line growth potential.”

As for dividends, the broker is forecasting fully franked dividends per share of $3.87 in FY 2022 and $4.07 in FY 2023. Based on the current CBA share price of $94.60, this will mean yields of 4.1% and 4.3% respectively.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share to look at is telco giant, Telstra. It could be a top option due to its ever-improving outlook which is being underpinned by the successful execution of its transformative T22 strategy and the impending T25 strategy.

The latter is aiming to drive strong earnings per share growth in the coming years, which could bode well for dividends.

Morgans is very positive on the company and has an add rating and $4.55 price target on them. It feels the market is undervaluing its shares and expects attractive yields for the foreseeable future.

The broker commented: “The SOTP [sum of the part] for TLS is worth more than the current share price (and steps to release this value are underway; albeit timing is unclear).”

In respect to dividends, Morgans continues to expect fully franked dividends per share of 16 cents for FY 2022 and FY 2023. Based on the current Telstra share price of $3.92, this implies yields of 4% for investors.

The post Analysts name 2 ASX 200 dividend giants to buy in March appeared first on The Motley Fool Australia.

More reading

• 3 reasons why Soul Pattinson (ASX:SOL) is a strong ASX dividend share idea
• These 3 ASX 200 shares are topping the volume charts on Friday
• The Telstra (ASX:TLS) share price has tumbled 9% in 6 weeks. What’s happening?
• Telstra (ASX:TLS) share price in the red amid new satellite deal
• Here are the 3 most heavily traded ASX 200 shares this Thursday

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 no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. 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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There are plenty of opinions out there on different ASX shares. Some stocks are rated as buys by multiple brokers.

If a business is seen as an opportunity by multiple analysts who think there is plenty of upside, then there could be an opportunity there. It is possible that all of those analysts are wrong at the same time though. So, keep that in mind.

Tyro Payments Ltd (ASX: TYR)

As the name may suggest, Tyro is a payments business. Its payment terminals are being used by many thousands of businesses around the country such as cafes.

The Tyro Payments share price has fallen by almost 60% over the past six months, with a 46% drop since the start of the year.

This business is rated as a buy by four brokers, including Ord Minnett and Morgans.

Brokers noted that margins and costs were worse than expected. However, despite the disappointment, brokers are expecting growth from the business.

Tyro is expected to show that transaction volume growth will help the ASX share’s margins.

Management pointed out that the second half is seeing strong momentum. January transaction value was up 35% to $2.7 billion and the February transaction value (to 18 February) was up 50% to $1.8 billion. E-commerce transactions soared 836% to $36.5 million. The payments business gross profit jumped 24% to $11.1 million.

The Ord Minnett price target is $3 on Tyro and the Morgans share price target is $2.68.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is an ASX share where it invests in investment managers to give them the optimal environment to deliver strong investment returns.

The company takes care of a number of things including distribution and client services, compliance, finance legal, technology, seed funds under management (FUM) and working capital, fund administration and so on. It means the fund managers can just focus on generating the best returns.

It’s invested in a number of fund managers including Hyperion, Plato, Solaris, Antipodes, Firetrail, Spheria, Metrics, Coolabah and Five V.

Pinnacle is rated as a buy by at least four brokers, including Ord Minnett with a price target of $15. Whilst the Pinnacle share price has fallen by 37% since the start of the year, the broker likes the growth potential of the business. It’s possible the business could make another acquisition – it’s looking for opportunities.

The HY22 result showed that the ASX share’s aggregate affiliate funds under management (FUM) was $93.6 billion at 31 December 2021, which was up 33% year on year. The net profit after tax (NPAT) rose 32% to $30.3 million.

Pinnacle says that it has an excellent platform in place to continue to prosper, driven by growth within existing affiliates, incubating new affiliates and strategies, domestically and offshore.

Ord Minnett thinks the Pinnacle share price is valued at 23x FY22’s estimated earnings.

The post 2 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia.

More reading

• Tyro (ASX:TYR) share price continues its tumble, down 5% today
• ASX tech shares take a hammering on Friday
• This ASX share just halved in price, so why is it time to buy?
• Why Betmakers, Fortescue, Suncorp, and Tyro shares are falling
• These are the 10 most shorted ASX shares

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. owns and has recommended PINNACLE FPO and Tyro Payments. The Motley Fool Australia owns and has recommended PINNACLE FPO. The Motley Fool Australia has recommended Tyro Payments. 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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If you’re a fan of growth shares, then you may want to look closely at the three shares listed below.

Here’s why these could be growth shares to buy:

Adore Beauty Group Limited (ASX: ABY)

The first ASX growth share to look at is Adore Beauty. It is an integrated content, marketing and e-commerce retail platform with a focus on the $11 billion per year Australian beauty and personal care market. While it has been growing at a rapid rate in recent years and now has almost 1 million active customers, it still only has a tiny share of the market. The good news is that Adore Beauty has been tipped to keep winning market share over the next decade as the structural shift online continues. This bodes well for its future growth.

The team at UBS is positive on Adore Beauty. The broker currently has a buy rating and $4.70 price target on its shares.

Altium Limited (ASX: ALU)

Another growth share for investors to consider buying is Altium. It is the electronic design software provider behind the Altium 365 and Altium Designer platforms. These platforms are the leaders in their field and are now aiming to dominate their market. This bodes well for its future growth given how the Internet of Things (IoT) and AI markets are underpinning an explosion of electronic devices globally. This is expected to lead to a significant increase in demand for electronic design software in the future.

The team at Bell Potter is bullish on Altium. It currently has a buy rating and $38.75 price target on the company’s shares.

Megaport Ltd (ASX: MP1)

A final ASX growth share that could be a buy is Megaport. It is a leading cloud connectivity and networking solutions provider which looks set to benefit massively from two long-term structural tailwinds. These are the adoption of public cloud (and multi-cloud usage) and the transition towards Networking as a Service (NaaS). Goldman Sachs has been looking into its opportunity and estimates it to be $129 billion per annum across its current geographies.

In light of this, it won’t be a surprise to learn that Goldman has a buy rating and $19.50 price target on its shares.

The post 3 buy-rated ASX growth shares analysts are recommending appeared first on The Motley Fool Australia.

More reading

• 3 promising small cap ASX shares to watch
• Analysts name 2 excellent ASX tech shares to buy
• 2 ASX growth shares analysts say have 40%+ upside
• Top ASX shares to buy in March 2022
• Analysts are tipping massive upside potential for these ASX growth 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. owns and has recommended Altium and MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and MEGAPORT FPO. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

GQG Partners Inc (ASX: GQG)

According to a note out of Morgans, its analysts have retained their add rating but trimmed their price target on this fund manager’s shares to $2.27. Morgans was pleased with GQG’s full year results and expects more of the same in FY 2022 thanks to the positive performance of its strategies. The broker expects this to solidify its near-term flows outlook. In light of this, it feels the recent de-rating of its shares is unwarranted and a buying opportunity. The GQG share price was trading at $1.32 at Friday’s close.

Transurban Group (ASX: TCL)

A note out of Macquarie reveals that its analysts have retained their outperform rating with a slightly trimmed price target of $14.80. The broker has been looking at recent traffic data and was pleased to see that some of its roads were now at pre-pandemic levels. Others, particularly those linking to airports, are expected to follow in time once travel markets return to normal. The Transurban share price was fetching $12.59 at the end of the week.

WiseTech Global Ltd (ASX: WTC)

Analysts at Morgan Stanley have retained their overweight rating and lifted their price target on this logistic solutions company’s shares to $50.00. This follows the release of the company’s half year results at the end last month. According to the note, the broker thought that WiseTech delivered a strong half year result, which has led to its analysts upgrading their earnings forecasts. The WiseTech share price ended the week at $46.03.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Why brokers rate these ASX 200 dividend shares as buys
• Here’s why analysts rate these ASX dividend shares as buys
• Analysts names 2 ASX value shares to buy with 20%+ upside potential
• Leading brokers name 3 ASX shares to buy today
• 2 high-yield ASX dividend shares for March 2022

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. owns and has recommended WiseTech Global. The Motley Fool Australia owns and has recommended WiseTech Global. 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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Some of the leading ASX growth shares have seen their share prices fall significantly over the last few months.

A few may be dropping because they are reporting a reversal of the gains from COVID-19. But some are still reporting quick growth, it may be other factors that are causing the decline such as the Russian invasion of Ukraine or the fast pace of inflation (and expected interest rate rises).

Cettire Ltd (ASX: CTT)

The Cettire share price has fallen by 46% since the start of the year.

What does Cettire do? It’s a retailer of personal luxury products on its website, with more than 200,000 products from over 1,700 luxury brands.

The ASX growth share recently announced its FY22 half-year result which included a high level of growth. Sales revenue soared 181% to $113.7 million whilst the delivered (to customer) profit jumped 118% to $24.7 million. Its offering is resonating with global customers.

Management boast of the scalability of the company’s capital-light, high cash-generating business model which is helping re-invest back into the company and grow the business. Despite investing in things like marketing, the operating cash flow increased 43% to $12.3 million.

January 2022 gross revenue was up 242% year on year, showing that the rapid growth continues.

It’s working on a number of growth areas, including the launch of a mobile app which is expected to improve conversion rates over time. The launch of the beauty category will expand the company’s total addressable market.

Cettire has also announced that it’s entering the mainland Chinese market, which is being helped by a partnership with e-commerce giant JD.com.

Pointsbet Holdings Ltd (ASX: PBH)

Over the last six months, the Pointsbet share price has fallen by 63%.

Pointsbet is a growing global corporate bookmaker, with much of its attention pinned on the huge market of the USA where it is quickly expanding its presence.

Looking at some of the key numbers of sports betting in the FY22 half-year result, turnover increased by 22% to $2.3 billion and the gross win margin increased by 2.7 percentage points, which helped grow the gross win by 63% to $250.9 million. The ASX growth share’s US saw the gross win rise 299% to $70.8 million.

The overall net win increased 77% to $146.7 million.

But the company continues to announce new market access and jurisdiction launches. Areas opened during the first half will benefit over time as more customers try out Pointsbet. The company also announced a number of positives after the HY22 reporting period.

For example, on 8 February 2022, Pointsbet took its first sportsbook bet in Pennsylvania. On 27 January, Pointsbet launched iGaming operations in West Virginia.

Canada is another geographic region that the ASX growth share’s management have their eyes on. On 3 February 2022, Pointsbet Canada received approval by the Alcohol and Gaming Commission of Ontario to be licensed a sportsbook in Ontario.

However, whilst the company is in this high-growth phase, its losses are increasing. The HY22 statutory net loss worsened by 71% to $146.4 million.

The post Beaten-up: Are these 2 top ASX growth shares turnaround buys? appeared first on The Motley Fool Australia.

More reading

• Game on! PointsBet (ASX:PBH) share price rebounds 18% on Thursday
• ASX 200 (ASX:XJO) midday update: Corp Travel Management’s ACCC boost, Zip downgraded
• Why Domino’s, Magellan, PointsBet, and Zip shares are falling
• ASX 200 (ASX:XJO) midday update: Rio Tinto, South32 storm higher, PointsBet sinks
• Why is the PointsBet (ASX:PBH) share price sinking 13% 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. owns and has recommended Cettire Limited and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Cettire Limited and Pointsbet Holdings Ltd. 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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March 2022 could be the month to jump on some of the leading ASX dividend shares after a period of volatility.

Concerns about the Russian invasion of Ukraine as well as the ongoing impacts of inflation give investors plenty to think about.

But regardless of what happens with share prices, ASX dividend shares may be able to keep producing cash payments for investors.

With that in mind, here are two income candidates:

Charter Hall Long WALE REIT (ASX: CLW)

This real estate investment trust (REIT) is one of the larger ones on the ASX.

It owns a diversified portfolio of property across a number of different sectors including pubs and bottle shops, ‘government’, telecommunications, grocery and distribution, fuel and convenience, food manufacturing, waste and recycling and ‘other’ (which includes life sciences, retail, banking, financial services and so on). The focus is on defensive industries that are resilient to economic shocks.

The ASX dividend share has many high-quality tenants, including Endeavour Group Ltd (ASX: EDV), Telstra Corporation Ltd (ASX: TLS), BP, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), David Jones, Metcash Limited (ASX: MTS) and Arnott’s Group. The REIT says it has a strong and stable tenant base.

Charter Hall Long WALE REIT boasts of a track record of delivering distribution growth to investors. It’s expecting to deliver a distribution of at least 30.5 cents per security in FY22, which would be up at least 4.5% on FY21. This translates into a distribution yield of at least 6% in this financial year.

The long portfolio weighted average lease expiry (WALE) gives the portfolio “long-term income security”. At 31 December 2021, the WALE was 12.2 years.

Citi rates it as a buy, with a price target of $5.71, which is lower than its net tangible assets (NTA) of $5.89 at 31 December 2021.

Rural Funds Group (ASX: RFF)

Since the start of 2022, the Rural Funds share price has fallen by 15%. It hasn’t been this low since October 2021.

It’s another REIT, but this one specialises in agricultural properties. Rural Funds owns a portfolio spread across different farm types including almonds, vineyards, macadamias, cropping and cattle.

The ASX dividend share has a goal of growing the distribution to investors by at least 4% per annum. It has managed to achieve this goal over the last several years.

It manages to achieve this target through a mixture of different methods.

Organic growth of rental revenue is supported by annual indexation and market rent revenues. Most lease revenue comes from listed and major corporate food-producing businesses. No rent relief was required during COVID-19. Around 44% of lease income is based on CPI inflation (which is increasing), whilst 34% has fixed indexation with a market review mechanism.

Rural Funds has a WALE of 9.2 years, which is one of the longest in the sector.

Another way that the REIT grows its revenue is by investing in its farms. This can mean either improving the existing farm, such as more water access points, or changing the farm to a more profitable use.

In FY22 it is expecting to pay a distribution of 11.73 cents per unit, which equates to a distribution yield of 4.4%.

The post Are these 2 top ASX dividend shares buys in March 2022? appeared first on The Motley Fool Australia.

More reading

• Will ASX REITs get smashed by rising interest rates?
• 2 top ASX dividend shares with 4%+ yields
• Analysts name 2 ASX dividend shares to buy now
• 3 reasons why the Charter Hall Long WALE REIT (ASX:CLW) share price is a top buy for dividends
• Rural Funds (ASX:RFF) share price jumps on first-half financials

Motley Fool contributor Tristan Harrison owns RURALFUNDS STAPLED. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET, RURALFUNDS STAPLED, and Telstra Corporation Limited. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Insurance Australia Group Ltd (ASX: IAG)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $3.90 price target on this insurance company’s shares. Its analysts believe IAG is growing its gross written premium (GWP) slower than system, which is extending its ongoing market share losses. The broker doesn’t appear confident that this trend will reverse any time soon and thus feels investors would be better off looking elsewhere in the sector. The IAG share price ended the week at $4.45.

Magellan Financial Group Ltd (ASX: MFG)

A note out of UBS reveals that its analysts have retained their sell rating and cut their price target on this fund manager’s shares to $15.40. This follows the release of another update which revealed a further reduction in its funds under management (FUM). In addition, the broker highlights that a ratings agency has downgraded its flagship Global Fund. This may not bode well for its FUM. The Magellan share price was fetching $15.48 at Friday’s close.

Reece Ltd (ASX: REH)

Analysts at Citi have retained their sell rating and cut their price target on this plumbing parts company’s shares to $16.83. According to the note, although Citi acknowledges that Reece delivered a solid half year result last month, it isn’t enough for a change in its recommendation. The broker continues to struggle with the multiples that the company’s shares trade on. The Reece share price was trading at $18.94 on Friday afternoon.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Playing limbo… Magellan (ASX:MFG) share price hits 7-year low
• Why Magellan, Nick Scali, Qantas, and Zip shares are tumbling today
• 5 ASX 200 shares slumping to 52-week lows on Friday
• This ASX share just halved in price, so why is it time to buy?

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 no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia Group Limited. 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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Washington H. Soul Pattinson and Co Ltd (ASX: SOL), or Soul Pattinson, is one of the leading ASX dividend shares.

It has already displayed longevity. The company has been listed on the ASX since 1903. It has survived through world wars, global pandemics, financial crashes and so on.

But that’s old history.

These are three reasons why the company is a very useful ASX dividend share:

Diversified portfolio

Soul Pattinson first started as a pharmacy business.

But now it’s a very diversified investment house. That means it operates by predominantly by investing in other businesses.

It has a portfolio of large and smaller ASX shares.

Some of the biggest holdings are TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Pengana Capital Group Ltd (ASX:PCG), Tuas Ltd (ASX: TUA), Pengana International Equities Ltd (ASX: PIA), Bank of Queensland Limited (ASX: BOQ), Bki Investment Co Ltd (ASX: BKI), Commonwealth Bank of Australia (ASX: CBA) and Bailador Technology Investments Ltd (ASX: BTI). There are many more.

The company also has a growing portfolio of unlisted and non-ASX shares. Examples of that include the electrical parts business Ampcontrol, Apex Healthcare, financial services, agriculture, swimming schools, resources and luxury retirement living.

Reliable cashflow funds dividends

With a contrarian mindset, Soul Pattinson has designed its portfolio to be defensive. The ASX dividend share says that its portfolio provides “reliable cash through market cycles which serves to protect downside in market corrections.”

Many of the ASX dividend share’s investments pay an annual dividend or distribution to shareholders.

Each year, Soul Pattinson receives all of that cash flow. It pays for its operating expenses and then it pays a large portion of that cash flow out as a dividend to investors. In FY21, it decided to pay 82.3% of its regular operating cash flows as a dividend.

With the bit of retained cash flow, the business invests in more opportunities. The company has a goal of paying steady and growing dividends.

Soul Pattinson has managed to grow its dividend every year since 2000. It has actually paid a dividend every year since it was listed in 1903.

Dividend yield

Soul Pattinson doesn’t have the biggest dividend yield on the ASX. But it does offer a payout that is substantially more than what people can get from a bank savings account.

Based on the trailing dividends, Soul Pattinson has a grossed-up dividend yield of 3.4%.

The post 3 reasons why Soul Pattinson (ASX:SOL) is a strong ASX dividend share idea appeared first on The Motley Fool Australia.

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• Aussie coal is in hot demand, and these ASX coal shares are booming
• Top brokers name 3 ASX shares to sell today
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Motley Fool contributor Tristan Harrison owns Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bailador Technology Investments Limited, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Bailador Technology Investments Limited and TPG Telecom Limited. 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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