Interest rates are predicted to remain low for the foreseeable future, so ASX dividend shares might just be the solution to finding excess returns. Here are three ASX dividend-paying shares that I’m liking at the moment.
Accent Group
Accent Group Ltd (ASX: AX1) is the leader in the distribution of performance and lifestyle footwear in Australia and New Zealand. It has a well-diversified and popular range of brands including The Athletes Foot, Hype DC, Platypus, Vans, DrMartens and Timberlands, amongst others.
I’d buy shares in Accent Group for capital gains as well as its dividends. The company has a strong history of shareholder wealth creation and I would be willing to back management for its future growth prospects.
In FY20, Accent declared a dividend of 9.25 cents per share, up 12.1% on the prior year. This represents a trailing dividend yield of around 4.74% based on current prices.
Accent Group did receive some wage subsidies earlier in the year, however, management indicated that these funds were not used for the final dividend. The company has a strong cash position and its stores are highly cash flow generative. For this reason, I’d say that Accent Group’s dividends would be quite consistent, and there’s also more potential upside in the share price itself.
For some further reading on Accent Group shares, check out this article: Why Accent Group is my favourite ASX retail share right now
Magellan
Magellan Financial Group Ltd (ASX: MFG) is a publicly-owned investment manager with over $102 billion funds under management (FUM). The company was founded in 2006 and currently has four investment funds: Global Equities, Infrastructure, Sustainable and Australian Equities.
Magellan has a fantastic track record of being able to grow its earnings over recent years. This has allowed the company to increase the amount of dividends it’s been able to distribute to its shareholders.
In FY20, Magellan was able to pay $2.14 per share (75% franked) in dividends to its shareholders – giving Magellan a trailing dividend yield of around 4.4%. Outperforming the broader market has helped grow its FUM and ensure that investors are rewarded. I like the future growth trajectory of the company and for this reason, I’d happily pick up some Magellan shares for the dividends.
Sonic Healthcare
Sonic Healthcare Limited (ASX: SHL) is a Sydney-based company that provides laboratory services, pathology, and radiology services.
Sonic Healthcare runs a progressive dividend policy and was still able to increase its total dividend in FY20 by 1.2% to $0.85 despite COVID-19 impacts. This means Sonic Healthcare shares are trading on a trailing dividend yield of around 2.5%.
The company has a long history of delivering dividends and typically pays out over 75% of its earnings in dividends. Given its long track record and management’s dividend growth strategy, I would say that Sonic Healthcare shares would provide a stable and consistent stream of passive income, combined with the potential for capital growth.
For some more ASX dividend share ideas, check out this article from Rask Media’s Jaz Harrison: 2 ASX dividend shares I’d buy in November
