With five consecutive months of interest rate rises from the RBA so far in 2022, many investors are seeking ways to help offset the rising cost of living. And one way to help make the hip pocket a little happier and healthier is with some extra income.
So, to hunt down some potential extra earnings, we asked our Foolish contributors which ASX dividend shares have piqued their interest in September.
Here's what the team came up with:
8 best ASX dividend shares for September 2022 (smallest to largest)
CSR Limited (ASX: CSR), $2.19 billion
Super Retail Group Ltd (ASX: SUL), $2.22 billion
Vanguard Australian Shares High Yield ETF (ASX: VHY), $2.38 billion
ARB Corporation Limited (ASX: ARB), $2.49 billion
Brickworks Limited (ASX: BKW), $3.14 billion
Coles Group Ltd (ASX: COL), $23.06 billion
Rio Tinto Limited (ASX: RIO), $35.03 billion
Macquarie Group Ltd (ASX: MQG), $68.73 billion
(Market capitalisations as of 9 September 2022)
Why our Foolish writers love these ASX dividend shares
CSR Limited
What it does: CSR manufactures building products that are used in the construction industry. These include plasterboard, insulation materials, glass, cement, and bricks. The company also has heavy exposure to aluminium.
By Zach Bristow: CSR shares have been traded down heavily in 2022, having slipped from 52-week highs of $6.22 in March to now trade at $4.52 apiece.
Despite the downtrend, the building supplies manufacturer came in with a solid set of numbers for its FY22 annual results, published in May. In particular, net profit after tax (NPAT) climbed 20% year on year to $193 million.
The profitable 12-month period saw management declare a final dividend of 18 cents per share, up 24% year on year. Based on the current share price, this gives CSR shares a trailing dividend yield of almost 7%.
The company forecasts that it will generate approximately $52 million in earnings before interest and tax (EBIT) in its property division for the year ending 31 March, 2023. Meanwhile, it hopes to deliver earnings in the range of $33 million to $49 million in its aluminum business.
The consensus of analysts covering CSR estimate its FY23 dividend payment to be 33.6 cents, according to Refinitiv Eikon data.
Motley Fool contributor Zach Bristow does not own shares in CSR Limited.
Super Retail Group Ltd
What it does: Super Retail Group is an Australian retail company that operates a number of well-known brands including Rebel Sport, Supercheap Auto, and BCF. Since its founding 50 years ago, the company has built a significant presence across Australia and New Zealand, now 716 stores strong.
By Mitchell Lawler: The Super Retail Group share price has been punished over the last year as profits shrunk amid inflationary cost pressures and supply chain issues. However, the company has remained profitable throughout – an essential tenet for a dividend share.
While Super Retail Group spans more than just automotive parts, I believe it's this portion of the business that is the most attractive. The average age of vehicles in Australia has long been over 10 years. And considering cost pressures stemming from inflation and rising interest rates are causing many people to tighten their belts, I believe car owners could now be inclined to hold onto their vehicles even longer. This could provide a boost for the company's Supercheap Auto division.
Right now, Super Retail Group is parading a 7.1% dividend yield. The defensive nature of this business gives me confidence in the prospects of future dividend returns for many years to follow.
Motley Fool contributor Mitchell Lawler does not own shares in Super Retail Group Ltd.
Vanguard Australian Shares High Yield ETF
What it does: The Vanguard Australian Shares High Yield ETF is an exchange-traded fund (ETF) that currently holds 72 listed, dividend-paying Australian companies, with a median market capitalisation of $52.9 billion.
By Bernd Struben: Income investors looking for instant diversification may want to investigate the Vanguard Australian Shares High Yield ETF. The ETF aims to hold an average of 71 large-cap, dividend-paying shares. And it focuses on companies with proven track records that are forecast to keep paying market-beating dividends.
At the current share price, the ETF pays a trailing dividend yield of 6.4%, franked at approximately 90%. Annual management fees of 0.25% are also low compared to more actively managed ETFs. Its largest holding is Commonwealth Bank of Australia (ASX: CBA), followed by BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB) and Woodside Energy Group Ltd (ASX: WDS). See what I mean by instant diversification?
Motley Fool contributor Bernd Struben does not own shares in the Vanguard Australian Shares High Yield ETF.
ARB Corporation Limited
What it does: ARB Corporation is Australia's largest manufacturer and distributor of four-wheel-drive accessories. There are 74 branded ARB stores scattered across Australia and the company ships to more than 100 countries.
By Brooke Cooper: The ARB share price has dumped around 44% year to date to currently trade at $30.36, despite the company posting strong earnings last month.
ARB Corporation pushed past supply chain issues and high staff absenteeism last financial year to post an 11.5% year-on-year increase in sales and a $122 million after tax profit – an 8.1% improvement on the prior corresponding period.
It also ended the financial year with $52.7 million of cash and no debt.
To top it off, ARB declared a 39 cent, fully-franked final dividend, bringing its full year payout to 71 cents per share – a 4.4% year-on-year increase that left the stock trading with a 2.3% dividend yield.
Motley Fool contributor Brooke Cooper does not own shares in ARB Corporation Limited.
Brickworks Limited
What it does: Brickworks may be best known as an Australian building products business that manufactures products like bricks, pavers, roofing materials, masonry, and more. It also has an American building products business that has a market-leading position in the United States.
By Tristan Harrison: In addition to its core business, Brickworks also has a large and growing asset base through its ownership of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Plus, it owns half of an industrial property trust, along with Goodman Group (ASX: GMG), which is seeing strong demand for its large, well-located warehouses. Excess land is sold into the industrial property trust and then properties are built on that land.
I'm attracted to the growing cash flow that Brickworks is receiving from its property trust and through Soul Pattinson. Those two segments are funding Brickworks' growing dividend, which hasn't been cut for over four decades. I really like the business for this reliability of its dividend income.
Furthermore, Brickworks recently announced it was unlocking more value by selling some of its manufacturing properties into a new property trust.
In terms of the yield, Brickworks has a trailing, grossed-up dividend yield of around 4.27%. I think that's a solid starting yield for a dividend investor.
Motley Fool contributor Tristan Harrison owns shares in Brickworks Limited.
Coles Group Ltd
What it does: Coles is a company that needs little introduction, with its vast network of popular supermarkets across the country.
By Sebastian Bowen: I believe it's hard to look past Coles as a quality ASX dividend share. This supermarket operator was one of the only blue-chip shares that was able to give investors a dividend increase across each of the COVID-affected 2020, 2021 and 2022 years – no mean feat!
Today, Coles is offering a fully-franked dividend yield of 3.7%. Due to Coles' consumer staples nature, headwinds that might affect other S&P/ASX 200 Index (ASX: XJO) shares, such as slow economic growth, inflation and rising interest rates, are arguably less of a concern when it comes to this company.
For me, the final feather in this grocery giant's cap is that its current dividend yield easily tops those offered by rivals such as Woolworths Group Ltd (ASX: WOW). As such, I believe investors could do a lot worse than Coles when it comes to ASX dividend shares in September.
Motley Fool contributor Sebastian Bowen does not own shares in Coles Group Ltd.
Rio Tinto Limited
What it does: Rio Tinto explores materials across four segments: iron, aluminium, copper, and minerals. Some of its projects include the Jadar project and the Rincon lithium project.
By Matthew Farley: On 2 September, broker Goldman Sachs confirmed its price target of $121.50 for Rio Tinto shares. This followed news the mining giant had reached an agreement to enable its Turquoise Hill acquisition to move ahead. Based on the current Rio Tinto share price, the target implies potential upside of around 29%.
Besides this possible short-term increase, I believe the bigger picture is that the demand for iron ore will bounce back strongly to prop up China's massive infrastructure and real estate projects. For some context here, Rio Tinto's iron ore operating segment contributed 80% to its earnings in 2021 and China buys around 70% of the world's total iron ore production.
China's zero-COVID policy will undoubtedly cause a slowdown in construction over the short term, but if the rest of the world's recovery from the virus can be used as a litmus test, I believe this will gradually ease.
Real estate holds around 70% of China's wealth according to The Economic Times, with it being seen as a popular pathway to retirement. This creates significant demand for new development projects, as well as the iron ore required to complete them. In short, real estate is highly important to China for both cultural and economic reasons, so I believe a sharp rebound in demand will be on the cards when China gets a grip on the virus and restrictions ease.
Based on the current Rio Tonto share price, the company has a trailing dividend yield of around 10%.
Motley Fool contributor Matthew Farley does not own shares in Rio Tinto Limited.
Macquarie Group Ltd
What it does: Macquarie is a global financial powerhouse that provides banking, financial, advisory, investment, and fund-management services.
By Aaron Teboneras: Since COVID-19 hit, Macquarie has increased its dividends to near record levels. In its FY20 first-half results, the board declared an interim dividend of $1.35 per share. However, this was bumped up to $2.72 in the following year (H1 FY22).
With the investment bank's half-year earnings due out in November, I believe this could be an opportune time to pick up some shares.
In its first-quarter update, Macquarie said it remains well-positioned to deliver superior performance in the medium term. This is because of its expertise in major markets, geographic diversity, and the ability to adapt its portfolio mix to changing market conditions.
The Macquarie share price is down by almost 16% in 2022, and could be trading at bargain levels according to one broker.
As reported by ANZ Share Investing, the team at Jefferies believes Macquarie is undervalued and recently raised its price target by 4.1% to $202 per share. This implies an upside of around 13% from where the Macquarie share price last traded at $177.83.
Currently, Macquarie has a trailing dividend yield of around 3.5%.
Motley Fool contributor Aaron Teboneras does not own shares in Macquarie Group Ltd.
