ASX 200 (ASX: XJO) shares can be a really good source of dividends because of their valuations and commitment to rewarding shareholders.
The ASX is home to compelling dividend stocks beyond just the miners and banks. I’ll tell you about two of them.
Telstra Group Ltd (ASX: TLS)
The ASX telco share has turned a corner over the last few years with its T22 strategy and T25 strategy that is helping lower costs, grow its network, improve efficiencies, unlock value through asset sales and grow profit. The Telstra share price is down 18% in 12 months.
Telstra’s ongoing mobile subscriber growth is helping increase its operating leverage with more users on the same telco infrastructure, enabling better profit margins.
The ASX 200 share’s board wants to grow the annual dividend per share, alongside the investing in its 5G network and other initiatives.
In the FY24 first half result, Telstra declared an interim dividend of $0.09 per share, an increase of 5.9%.
It currently has a dividend yield of around 7% including franking credits.
Brickworks Limited (ASX: BKW)
Brickworks is a diversified property business. It manufactures a variety of building products including bricks, paving, roofing, cement and more.
Amazingly, the company hasn’t cut its dividend for almost 50 years, which is a strong record of stability.
Its dividend growth is being funded by its Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shareholding and its large property asset portfolio.
One of the ASX 200 share’s best assets is its 50% stake in a joint venture industrial property trust with Goodman Group (ASX: GMG), which is where advanced warehouses are being built on empty land, creating strong rental earnings and unlocking value.
The Brickworks share price is down 12% from 8 March 2024 and it’s seemingly trading at a large discount to its underlying asset value when you add up the value all of the WHSP shares, property assets, building product assets and the debt.
Its last two dividends amount to a dividend yield of 3.5% including the franking credits.
