ASX dividend shares that can offer a good dividend yield and long-term growth could be exactly what income seekers are looking for.
If I were given $10,000 to invest in dividend stocks, I'd want to invest in companies that look like they're trading at good value. That could be either trading on a low price/earnings (P/E) ratio or trading at a pleasing discount to the underlying net asset value (NAV).
When companies are trading for cheaper than they're worth, it can mean they may offer a better yield and more capital upside.
With that in mind, below are three of my top ASX dividend shares right now.
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Collins Foods Ltd (ASX: CKF)
Collins Foods is a large KFC outlet operator, with a presence in Australia, Germany and the Netherlands.
One of the main ways the company is looking to grow its scale and profit is by adding more locations to its network in Australia and Europe. Each new location can add revenue, while a larger network may lead to stronger profit margins.
The FY24 result saw the business report revenue growth of 10.4% to $1.49 billion and underlying net profit after tax (NPAT) growth of 15.6% to $60 million. It grew its full-year dividend by 3.7% to 28 cents per share, which translates into a grossed-up dividend yield of 4.5%.
Broker UBS predicts that Collins Foods' profit and dividend could approximately double by FY29. The ASX dividend share's payout could be 60 cents per share in FY29, which translates into a forecast grossed-up dividend yield of 9.6%. Using the UBS forecast, it's trading at 17x FY25's estimated earnings.
Centuria Industrial REIT (ASX: CIP)
This is one of the most appealing real estate investment trusts (REITs), in my opinion.
It owns a large portfolio of industrial properties around Australia, including logistics and distribution warehouses. These properties are in high demand in our capital cities because of the limited space, the tailwinds of e-commerce, and the onshoring of logistics.
CIP fund manager Grant Nichols said:
During FY24, strong leasing activity has enabled CIP to grow its forecast FY25 earnings for the third consecutive year with rental growth continuing to more than offset the higher interest rate environment.
With a portfolio focused on urban infill industrial markets, CIP continued to capitalise on strong market tailwinds to deliver exceptional re-leasing spreads that averaged 43%7 across 300,000sqm of leasing.
With around 39% of portfolio leases expiring by FY28, CIP is well placed to continue benefiting from the rental growth that has occurred across Australia's urban infill industrial markets and the unrealised reversion embedded in the CIP portfolio.
The company expects to increase its distribution per unit to 16.3 cents, which is a forward distribution yield of 5.2%.
It reported it had net tangible assets (NTA) of $3.87 on 30 June 2024, so the ASX dividend share is trading at a 19% discount to its underlying value.
Metcash Ltd (ASX: MTS)
Metcash distributes supermarket items and liquor to several independent retailers, including IGA, IGA Liquor, Cellarbrations, The Bottle-O, and Porters Liquor. It also has various hardware businesses, including Mitre 10, Home Timber & Hardware, Total Tools, Alpine Truss, and Bianco Construction Supplies.
The ASX dividend share is aiming for a dividend payout ratio of 70% of underlying NPAT.
Ongoing population growth can help revenue and earnings grow over time. In the first seven weeks of FY25, total group sales were up 2.2%.
According to the projection on Commsec, Metcash is forecast to have a FY25 grossed-up dividend yield of 7.9%, and it's trading at 13x FY25's estimated earnings.
