I think that March 2022 could be a great time to start looking at some of the leading ASX dividend shares.
Not only do falling share prices mean that businesses are (probably) better value, but it also has the handy bonus of increasing the potential dividend yield on offer, assuming the yield doesn’t decline.
But I’d only go for businesses that are quite likely to maintain (or grow) their dividend. I like the look of these two:
Brickworks Limited (ASX: BKW)
Brickworks is one of the best ASX dividend shares around in my opinion. In-fact, it hasn’t cut its dividend for around 45 years. That’s a very strong record of reliability in my opinion.
How much is the dividend yield at the moment? Including the franking credits, Brickworks has a dividend yield of 4.1%, though I expect the next 12 months will show a dividend yield of 4.25%.
Not only does Brickworks have a long-term ‘investments’ division, but the asset value is also being driven higher by its 50% stake of an industrial property trust that it runs with Goodman Group (ASX: GMG).
Brickworks has a lot of land spread across different cities. Eventually, it doesn’t need that specific land in its operations, so Brickworks sells land into the property trust, where the trust then builds some high-quality industrial buildings on it. A huge Amazon warehouse facility is the latest project that will add to rental profit and asset values.
The combined cash flow of the investments division and industrial property trust is driving the dividend higher, regardless of what happens with the building products division. But I am hopeful of how the company can grow in the USA, which is a huge market.
Future Generation Global Investment Co Ltd (ASX: FGG)
The other ASX dividend share I want to tell you about is a listed investment company (LIC) called Future Generation Global.
But it’s a very rare type of LIC – its portfolio is actually a portfolio of different funds. The fund managers that run those funds are working for Future Generation for free so that the LIC can donate 1% of its net assets per year to youth mental health charities. This is a noble cause.
The FGG portfolio is set up to provide less volatility during typical market gyrations but still be able to deliver solid long-term returns. I’d say the ASX dividend share has been successful with this target.
In general, one thing about LICs is that sometimes you can buy their assets for less than they’re actually worth. An analogy would be that you can buy a basket of shares that is worth $1 for less than $1. Some LIC share prices trade at a 10% or 20% discount to the underlying value of the portfolio.
At 31 January 2022, the Future Generation Global net tangible assets (NTA) per share was $1.638. The FGG share price is currently at a 19% discount to this, which is a hefty discount if it’s still around that level. The NTA info is almost a month old. The discount could be even larger.
Future Generation Global recently bumped up its dividend. The dividend yield, including franking credits, is now 6.4%. It has an impressive dividend reserve, which can fund 8 years of dividends.
