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If investors are looking for income options, some ASX dividend stocks might be ideas.
Companies that pay a portion of their profits as dividends might be attractive for the cash returns they provide.
Some companies are quite proud of their dividend record.
Here are two to consider:
Brickworks is a leading company in the field of construction products. In Australia there are a number of products such as bricks, roofs, precast units, masonry and more. In the United States, it has become a large brick maker in the northeast of the country after a few different acquisitions including Glen Gery.
The company actually finances its dividends from two other sources of income. There is its large shareholder base of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). It also owns half of an industrial property trust with Goodman Group (ASX: GMG).
Soul Patts is an investment house with a diverse portfolio of different names including TPG Telecom SA (ASX: TPG), Australian Pharmaceutical Industries Ltd (ASX: API), New Hope Corporation Limited (ASX: NHC), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).
Brickworks love Soul Patts for its defensive profits and growing dividends. They are both ASX dividend stocks.
The industrial property fund has a growing real estate portfolio of important assets for e-commerce or logistics. Two of the most recent projects concern Amazon and Coles Group Ltd. (ASX: COL). When these two assets are completed, Brickworks expects growth in both rental income and valuation.
These assets fund the stability and dividend growth of Brickworks. It has not reduced its dividend for over 40 years.
At the current Brickworks share price, it has a grossed dividend yield of 3.5%.
JB Hi-Fi is one of the largest retailers in Australia and New Zealand, with JB Hi-Fi and The Good Guys store networks.
The business has experienced strong growth since the onset of COVID-19, with customers looking for products to learn, work and play at home.
It is currently rated as a buy by broker Credit Suisse.
JB Hi-Fi saw its total sales increase 12.6% to $ 8.9 billion, with online sales increasing 78.1% to $ 1.1 billion.
ASX’s dividend share benefited from improved gross profit margin as well as lower cost of doing business in percentage terms. This helped total profit before interest and taxes (EBIT) to rise 53.8% to $ 743.1 million. Earnings per share (EPS) rose 67.5% to 440.8 cents. This funded a 51.9% increase in the annual dividend to 287 cents.
While sales declined slightly in the first few weeks of FY22, JB Hi-Fi is still experiencing increased customer demand and strong sales growth compared to FY20.
Credit Suisse expects a reduction in the FY22 dividend compared to FY21, but higher than the FY20 dividend. Looking at the FY22 projections, JB Hi-Fi is valued at 14x the estimated earnings of FY22 with an expected gross dividend yield of 6.5%.