2 ASX 200 shares that could be top buys for dividends

Premier Investments is one leading ASX 200 dividend share.

| More on:

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

These S&P/ASX 200 Index (ASX: XJO) shares offer attractive dividend yields for investors.

Businesses that have a relatively high dividend payout ratios and attractive valuations can have good yields on offer.

There are plenty of ASX 200 shares that pay dividends such as Westpac Banking Corp (ASX: WBC), Rio Tinto Limited (ASX: RIO) and Santos Ltd (ASX: STO).

However, these two income stocks could be particularly interesting for dividend investors:

man placing business card in pocket that says dividends signifying asx dividend shares

Image source: Getty Images

Premier Investments Limited (ASX: PMV)

Premier Investments is one of the leading ASX 200 shares involved in the retail industry. It has a number of apparel brands within its portfolio such as Just Jeans, Peter Alexander, Jay Jays, Dotti and Portmans. It also owns Smiggle, as well as sizeable investments in Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

In FY21, Premier Investments' board declared a final fully franked dividend of $0.46 per share (up 27.8%), taking the full year fully franked dividend to $0.80 per share (up 14.3%).

The trailing full year dividend of $0.80 per share, translates to a grossed-up dividend yield of 4.2%.

The ASX 200 dividend share experienced a large rise in profitability during FY21, which included strong online growth. FY21 retail global sales rose 18.7% to $1.4 billion with Peter Alexander sales rising 34.7% to $388.2 million. Overall online sales jumped 36.4% to $300.7 million. FY21 net profit rose 97.3% to $271.8 million.

Despite widespread lockdowns for many of its stores in the first 17 weeks of FY22, Premier Investments' sales were only down by 3.5% and had improved nicely from the update given in September 2021 when its FY22 was only a few weeks old.

According to Commsec, the Premier Investments share price is valued at 20x FY22's estimated earnings with a projected grossed-up dividend yield of 4.7%.

Dicker Data Ltd (ASX: DDR)

Dicker Data claims to be Australia's leading distributor of IT hardware, software, cloud and internet of things solutions for reseller partners. It helps business clients transition customers through technological change.

The IT business is benefiting in a number of areas, with strong growth since the onset of COVID as more businesses need cloud infrastructure and home office capabilities.

On top of that, the continuing global chip shortage and consequent supply constraints have contributed to an overall improvement in "margin quality". This is expected to continue for the foreseeable future.

Dicker Data is experiencing strong demand with a backlog of orders to fulfil and as supply improves, it's expecting to meet this demand in the final quarter of 2021.

The ASX 200 dividend share notes that the role of technology in business success continues to proliferate and the evolving hybrid and modern workforce becomes increasingly dependent on more intelligent, faster and collaborate tech solutions.

Cybersecurity is another area that Dicker Data can generate growing earnings from.

In the company's latest update for the nine months to September 2021, it reported that total revenue was up 16.1% to $1.72 billion and profit before tax had increased by 26% to $76.6 million.

The last 12 months of dividends amounts to a grossed-up dividend yield of 4%. According to Commsec, the Dicker Data share price is valued at 27x FY23's estimated earnings.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Premier Investments 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 man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Buy Macquarie and this ASX 200 passive income share: analysts

These could be the shares to buy if you want a passive income boost.

Read more »

ATM with Australian hundred dollar notes hanging out.
Dividend Investing

4 ASX 200 shares trading ex-dividend on Wednesday

These ASX 200 shares will be rewarding their shareholders with dividends very soon.

Read more »

A woman wearing glasses and a black top smiles broadly as she stares at a money yarn full of coins representing the rising JB Hi-Fi share price and rising dividends over the past five years
Dividend Investing

Buy these ASX dividend shares with big yields today: experts

These ASX shares could give your passive income a major boost during the cost of living crisis.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices
Dividend Investing

3 ASX 200 shares trading ex-dividend on Tuesday

Expect to see these 3 ASX 200 shares drop tomorrow

Read more »

A couple sits in their lounge room with a large piggy bank on the coffee table. They smile while the male partner feeds some money into the slot while the female partner looks on with an iPad style device in her hands as though they are budgeting.
Dividend Investing

Buy these ASX dividend shares right now for income: analysts

Here's why analysts say these could be top options for income investors this month...

Read more »

A woman smiles widely while using an old fashioned hand set telephone with dial.
Dividend Investing

Here's how much I'd need to invest in Telstra shares to generate a $200 monthly income

Telstra has grown its dividends again in 2023.

Read more »

A sophisticated older lady with shoulder-length grey hair and glasses sits on her couch laughing while looking at her phone
Dividend Investing

I reckon these are 2 of the best ASX income stocks to buy in March

These look like two winners for income to me.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

Analysts name 2 ASX dividend shares to buy with 4%+ yields

These ASX dividend shares good be quality options for income investors right now.

Read more »