Some ASX 200 (ASX: XJO) shares are high quality dividend stocks in my opinion. They combine a good yield with a track record of reliability.
They may not produce the strongest total returns overall, but I think a combination of solid dividends and decent capital growth can mean they outperform the overall ASX 200 whilst delivering good income.
Here are three dividend pick ideas:
Magellan Financial Group Ltd (ASX: MFG)
Magellan’s share price has been falling over the past couple of months, which has been pushing up the trailing dividend yield. Its international share strategy performance hasn’t been strong over the last few months, but that doesn’t concern me – Magellan is a long term investor and it has an aim of protecting investor capital during downturns, so underperformance is quite likely during major bullish months.
I think Magellan’s FUM will continue to rise over time through investment performance and additional funds inflows. On top of that, I believe that the retirement product, which is likely to be announced this year, could lead to even more funds inflows.
Finally, I think that the principal investments that Magellan has made in Barrenjoey, Finclear and Guzman y Gomez has made could help increase its value and profit over the long term.
Including franking credits in the yield, at the latest Magellan share price it has a dividend yield of around 6%.
Evolution Mining Ltd (ASX: EVN)
A gold miner isn’t one of the businesses that I’d normally look at, but I did recently write that gold is an interesting investment class to think about. The gold price has been rising in recent years and Evolution Mining is capitalising on that.
Evolution Mining has dramatically increased its dividend since 2015, rising from $0.02 per share to $0.16 per share. That’s a huge amount of growth of the ASX200 share’s income payments.
It’s generating strong levels of cash. In the September 2020 quarter it made mine operating cash flow of $272.3 million and group cash flow of $118.9 million. It ended the quarter with net bank debt of $180.3 million, down from $196.4 million at June 2020.
Just over a month ago the company announced it had acquired a 100% interest of the Crush Creek project to unlock a bit more growth.
Including franking credits in the yield, at the latest Evolution Mining share price it has a dividend yield of around 5%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP is one of my favourite ASX200 shares for the long term. It has already been around for over a century and it could continue to be around for many years because of the industry it operates in – it’s an investment house that owns various assets including a large chunk of shares of TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Clover Corporation Limited (ASX: CLV), Palla Pharma Ltd (ASX: PAL) and Australian Pharmaceutical Industries Ltd (ASX: API).
It’s very diversified and its those assets that are funding the steady and growing WHSP dividend, which has risen every year since 2000.
WHSP is actively increasing its exposure to unlisted businesses. Some of its recent investments include swimming schools and agriculture.
Including franking credits in the yield, at the latest WHSP share price it has a dividend yield of around 3%.
