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Date : 29/01/2024

Top 3 Dividend Stocks For This Week

In the current high-interest rate environment, many ASX income stocks’ dividends have significantly increased. While savings accounts offer better returns than they used to in the past, the tempting yields in the stock market shouldn’t be overlooked. Particularly since dividends usually grow over time, and bank interest rates will decrease as interest rates go down in 2024.

When stock prices decline, it presents an opportunity to purchase shares of businesses at more attractive valuations. This drop in share prices boosts the dividend yield. For instance, if a business initially offers a 6% dividend yield, and the share price drops by 10%, the yield effectively becomes 6.6%.

If you’re considering adding some new income-generating stocks to your portfolio this month, it’s worth exploring the following ASX dividend stocks that analysts are recommending for their attractive yields:

Charter Hall Long WALE REIT (ASX: CLW):

This real estate investment trust owns a diverse range of properties, all of which are leased on long terms. Charter Hall Long WALE REIT (ASX: CLW) anticipates paying a distribution per security of 26 cents, resulting in an appealing forward yield of 7.2%. Charter Hall generates stable income for investors with an average lease expiry of 11 years and a high occupancy rate of 99.9%. Their property portfolio includes telecommunications exchanges, service stations, premium office and retail spaces, Bunnings buildings, and logistics assets. About half of their leases are linked to CPI inflation, while the rest have a fixed 3.1% rental increase for FY24, ensuring a steady rental income stream.

ASX-CLW dividend

Tourism Holdings Ltd (ASX: THL)

Tourism Holdings Ltd (ASX: THL) is the largest commercial recreational vehicle rental operator globally. Morgans, a brokerage firm, recommends buying THL shares due to their attractive valuation. Considering its market leadership, the company is trading at a modest price-to-earnings ratio (PE) of 9.3x for FY25. Additionally, Morgans predicts decent dividend yields in the near future, with expected dividends per share of 15 cents in FY 2024 and 17.6 cents in FY 2025. THL’s current share price of $3.37 translates to yields of 4.4% and 5.2%, respectively. Morgans currently rates THL shares as an “add” with a target price of $5.02.

Tourism Holdings Ltd stocks dividend

Metcash Ltd (ASX: MTS)

Metcash Ltd (ASX: MTS) supplies various independent retailers with food and beverages, including well-known brands like IGA, Cellarbrations, The Bottle-O, and more. Its hardware division, which owns brands such as Mitre 10, Home Timber & Hardware, and Total Tools, stands out. It also supports independent operators under banners like Thrifty-Link Hardware and True Value Hardware. Metcash has committed to a dividend payout ratio of 70% of underlying net profit after tax (NPAT). According to Commsec, this ASX income stock is expected to offer a grossed-up dividend yield (including franking credits) of 8.2% in FY24. While the food and liquor divisions provide defensive earnings, the hardware division may face short-term challenges due to the broader economy. However, a potential reduction in interest rates in 2025 or 2026 could rekindle more robust demand in this segment.

Metcash Ltd Stock Dividend

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