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3 ASX dividend shares rated as buys by brokers

Tristan Harrison

It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.

If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.

Every so often MarketIndex collates the broker recommendations of 450 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is.

The below ideas have dividend yields above 5% and a market capitalisation above $1 billion. However, a high dividend yield can indicate a falling share price or limited growth prospects.

Here are three of the ASX dividend shares that fit the bill:

New Hope Corporation Limited (ASX: NHC) 

New Hope has a grossed-up dividend yield of 11%.

Lots of things are going the way of New Hope except for the direction of the coal price recently, which largely determines the returns the company can generate. New Hope recently won the Queensland Court of Appeal case which could mean the Queensland Government will soon give the final approvals for the New Acland Coal Mine Stage 3 Project.

New Hope has also recently finalised the acquisition of the additional 40% interest in Bengalla which will hopefully boost earnings with in the coming years. It has grown its dividend each year since 2016.

Super Retail Group Ltd (ASX: SUL) 

Super Retail has a grossed-up dividend yield of 7%.

The retail business operates several businesses including Macpac, BCF, Supercheap Auto and Rebel.

In the first 16 weeks of FY20 the company delivered total sales growth of 4.2% and like for like sales growth of 3.2%, although this has come at the expense of profit margin, but sometimes volume is needed to maintain (or even grow) profit margins.

Super Retail has been steadily growing its dividend for a while and it would take a deterioration of retail conditions to break that record.

Woodside Petroleum Limited (ASX: WPL) 

Woodside has a grossed-up dividend yield of 7.6%.

The oil & gas giant is known for having one of the bigger dividend yields in the resource sector with a focus on shareholder returns.

Woodside has increased its dividend strongly since 2016 and has been busy investing in growth such as the Scarborough and Greater Enfield projects to grow profit in the coming years.

Foolish takeaway

Both New Hope and Woodside have attractive dividend yields today but we have seen earlier this decade how quickly those dividends can plunge lower. For that reason I’d rather rely on Super Retail if I relied on dividends to fund my life’s expenses.

The post 3 ASX dividend shares rated as buys by brokers appeared first on Motley Fool Australia.

These top dividend shares show the types of defensive businesses with good yields that you can find on the ASX instead of resource businesses.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019