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:
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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%.
