2 ASX 200 shares to buy for dividends

These 2 S&P/ASX 200 Index (ASX:XJO) shares could be buys for dividends, including property business Centuria Industrial REIT (ASX:CIP).

| More on:
Telstra dividend upgrade best asx share price dividend growth represented by fingers walking along growing piles of coins upgrade

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are some quality S&P/ASX 200 Index (ASX: XJO) that could be options for dividends.

It's hard to generate much income from the bank right now because of the low interest rate environment right now.

But these two ASX 200 dividend shares have fairly high yields for FY21:

Centuria Industrial REIT (ASX: CIP)

The broker UBS rates this real estate investment trust (REIT) as a buy with a price target of $3.54.

It's the ASX's largest listed pure-play industrial REIT, it now has 62 high quality industrial assets with a total portfolio value of more than $2.6 billion.

The ASX 200 dividend share has largely recovered from the COVID-19 crash, with the share price now back to $3.40. At the time of the FY21 half-year result release, it had an occupancy rate of 97.7% and a long weighted average lease expiry (WALE) of 9.8 years.

The Centuria Industrial REIT net tangible assets (NTA) has increased to $3.32 per share.

In FY21 it's expecting funds from operations (FFO) per unit to be no less than 17.6 cents per unit (which is better than the 17.4 cents per units which was forecast at the start of the financial year).

Centuria Industrial REIT is expecting to pay a distribution per unit of 17 cents per unit, which is paid quarterly. That translates to a FY21 distribution yield of 5%.

Talking about the prospects of the REIT, Jesse Curtis, fund manger of the ASX 200 share, said:

CIP's strategy is to deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets. Sector tailwinds continue to support investment fundamentals for industrial assets drawing both domestic and international capital to the sector. Tenant demand remains robust, particularly for high quality industrial assets located within infill locations close to major infrastructure. In a tightly held industrial market CIP's portfolio will continue to be a key beneficiary of these sector themes.

APA Group (ASX: APA)

APA is one of the largest (energy) infrastructure businesses on the ASX. It owns and/or manages and operates a portfolio of assets worth around $22 billion. The key asset is a large national network of gas pipelines. APA also owns a number of other energy assets including gas storage, gas power station and renewable energy generation.

The business is always on the lookout to invest in new energy opportunities in Australia. It's also looking for ideas in the US, which has been delayed because of the COVID-19 pandemic.

The ASX 200 dividend share has one of the longest growth streaks, going back before the GFC.

FY21 is no exception. In the half-year result, the business managed to increase its operating cashflow by 1.4% to $519 million and the distribution went up by 4.3% to 24 cents per security. APA funds its distribution growth from cashflow growth. Each new project can unlock more cashflow.

APA has established its 'pathfinder program' to explore a range of new energy technologies, many of which have the potential to leverage APA's existing assets.

Organic capital growth is expected to be over $1 billion over FY21 to FY23, building on the $460 million Northern Goldfields Interconnect and $38 million Gruyere Hybrid Energy Microgrid announced in the period.

APA expects to pay a distribution of 51 cents per unit in FY21, which translates to a distribution yield of 5%.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

a mature aged couple dance together in their kitchen while they are preparing food in a joyful scene as the Breville share price rises on the back of a 25% profit surge
Dividend Investing

The best ASX income shares for retirees in 2025

Let's see what makes these shares top picks for retirees.

Read more »

A retiree relaxing in the pool and giving a thumbs up.
Dividend Investing

3 under-the-radar ASX All Ords shares that could fund your early retirement

I think all three of these relatively unknown stocks are strong choices for retirement.

Read more »

Falling yellow arrow with descending wooden bars with the percentage sign written on them.
Dividend Investing

Buy these ASX dividend shares to beat falling interest rates

Let's see which dividend shares analysts are tipping as buys this month.

Read more »

A senior couple discusses a share trade they are making on a laptop computer
Dividend Investing

1 ASX dividend stock down 54% I'd buy right now

This business could build good returns for investors.

Read more »

A woman wearing glasses and a black top smiles broadly as she stares at a money yarn full of coins representing the rising JB Hi-Fi share price and rising dividends over the past five years
How to invest

How much do I need to invest in ASX shares for $20,000 a year in passive income?

We look at three top ASX dividend shares to earn a $20,000 annual passive income stream.

Read more »

A happy elderly woman smiles and cheers as she looks at good investment news on her laptop.
Retirement

3 ASX dividend shares paying more than the pension in retirement

How much money would you need to have invested to receive more in ASX dividends than the pension?

Read more »

A happy older couple relax in a hammock together as they think about enjoying life with a passive income stream.
Dividend Investing

Here's why I own these 3 ASX dividend shares for passive income

These companies pay me handsomely to own them.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Dividend Investing

With a yield of 6.9%, how much upside does Macquarie tip for APA Group shares?

Let's see what the broker is saying about this high-yield dividend stock.

Read more »