2 high-yielding ASX 200 dividend shares

These 2 S&P/ASX 200 Index (ASX:XJO) dividend shares have quite high dividend yields and have been growing their dividends.

| More on:
asx blue chip shares represented by pile of blue casino chips in front of bar graph

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 a few S&P/ASX 200 Index (ASX: XJO) dividend shares that have relatively high dividend yields.

Businesses in the ASX 200 are large enough where they are normally generating high levels of cashflow and can fund sizeable dividends.

These two businesses have high dividend payout ratios and high dividend yields:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) which is managed by Charter Hall Group (ASX: CHC).

It aims to invest in high quality real estate assets that are predominantly leased to corporate and government tenants on long term leases. It actually has one of the longest weighted average lease expiry (WALE) in the REIT industry, of 14.1 years.

The ASX 200 dividend share has 459 properties worth $4.48 billion.

Those properties are spread across a number of resilient and defensive sectors. Its income exposure is spread across the following: telecommunications (17%), government (15%), grocery and distribution (14%), fuel and convenience (13%), pubs and bottle shops (12%), food manufacturing (10%), waste & recycling (2%) and 'other' (16%). 'Other' includes retail, banking, finance and security and defence services.

Major tenants include Telstra Corporation Ltd (ASX: TLS), Australian government entities, BP, Woolworths Group Ltd (ASX: WOW), Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), David Jones, Metcash Limited (ASX: MTS), Arnott's Group, Westpac Banking Corp (ASX: WBC) and Bunnings.

The FY21 half-year result saw continued growth of the business despite all of the COVID-19 impacts. HY21 saw operating earnings per security (EPS) increase by 3.6% to 14.5 cents. The distribution also grew 3.6% to 14.5 cents because it has a 100% payout ratio. It also grew its distribution during 2020 despite COVID-19.

In FY21, it's expecting to increase its operating EPS by at least 2.8% to 29.1 cents, which translates to a forward distribution yield of 5.9%.

The ASX 200 dividend share is rated as a buy by Morgan Stanley.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a funds management business with a market capitalisation of $8.8 billion according to the ASX.

It generates most of its revenue and profit from managing a large pool of capital for investors. In the latest monthly update for March 2021, Magellan saw its total funds under management (FUM) increase by $5.4 billion, with $206 million of net inflows.

The leadership team are always looking for new and innovative ways to service clients and financial planners. The restructuring of its global equity funds was one example.

It's currently working on launching a retirement product, it just needs approval from regulators.

The ASX 200 dividend share is also looking for businesses to take investments in. They have to be high quality businesses with meaningful scale, provide attractive returns and contribute intellectual capital.

For example, it has taken a $156 million investment in Barrenjoey. It has also invested $20 million in Finclear, as well as taking a stake in Guzman y Gomez.

In the FY21 half-year result it decided to grow the interim dividend by 5% to 97.1 cents per share.

It's currently rated as a buy by Morgans, with a price target of $58.26. The broker expects the FY21 dividend to be $2.06, which would be a partially franked dividend yield of 4.25%.

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. 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 woman sits at a table with notebook on lap and pen in hand as she gazes off to the side with the pen resting on the side of her face as though she is thinking and contemplating while a glass of orange juice and a pair of red sunglasses rests on the table beside her.
Dividend Investing

The smartest ASX dividend shares to buy with $3,000 right now

These businesses offer a pleasing dividend yield and great value.

Read more »

Happy woman working on a laptop.
Dividend Investing

The smartest ASX dividend stocks to buy with $1,000 right now

High yields are hard to find these days.

Read more »

Different Australian notes.
ETFs

Own the Vanguard US Total Market Shares Index ETF? Here's your next dividend

Vanguard announced the final distribution amount for VTS ETF investors today.

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

Own SPDR ASX ETFs? Here is your next dividend and when you'll receive it

State Street Global Advisors announced distribution payment amounts and dates today.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Dividend Investing

Forget CBA shares and buy these ASX dividend stocks

Analysts think these shares are better buys that CBA right now.

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Dividend Investing

3 ASX dividend shares to buy to beat falling interest rates

Analysts think these buy-rated shares could generate great yields.

Read more »

An oil refinery worker stands in front of an oil rig with his arms crossed and a smile on his face as the Woodside share price climbs today
ETFs

This ASX ETF has a 4% dividend yield. Should you buy for income?

There aren't too many ETFs offering more than 4% right now...

Read more »

Australian notes and coins symbolising dividends.
Energy Shares

Tempted by the big dividend yields on ASX energy shares? Here's why you should think again

The income from these stocks might not be as good as it seems.

Read more »