There are some really good ASX 200 (ASX: XJO) shares that are paying dividends and may be options for income.
ASX 200 shares might be big enough to be able to get through recessions without any major problems. They might already have good dividend records, including through the heavily impacted year of 2020.
Here are two to consider:
APA Group (ASX: APA)
APA is a large gas infrastructure business. It owns a national gas pipeline and has stakes in gas storage and gas-powered energy generation assets. APA also has a growing portfolio of renewable energy assets.
The ASX 200 share funds its dividend from the cashflow that it receives each year. APA has been busy announcing more projects such as new pipelines on both the east and west of Australia.
Despite that, and the ever-growing APA distribution, the APA share price has fallen 19% over the last year.
The business has one of the longest-running distribution/dividend growth records on the ASX. That’s handy if you’re hoping for a pretty reliable income stream, if APA can continue that record.
APA grew its distribution in FY21 and the newer projects will hopefully lead to higher cashflow in in FY22 and another increase.
It could keep growing earnings over the long term if it can find some opportunities in the US.
Magellan Financial Group Ltd (ASX: MFG)
The Magellan share price has been rising over the last few weeks, but it still offers a sizeable yield.
According to CommSec, Magellan is expected to pay a partially franked dividend yield for FY21 of 3.8%.
The ASX 200 share generates its profit from the funds under management (FUM) that it looks after, which is currently close to $110 billion.
The new FUM comes at a very high profit margin, which is useful for growing profit. Magellan also pays out most of its profit as a dividend each year. It’s nice getting paid real cash as a dividend, as well as experiencing capital growth.
Magellan’s retirement product called FuturePay and its external investments, such as Barrenjoey and Guzman y Gomez could lead to higher profit in the future. It’ll be interesting to see if it makes more external investments in the coming years.
I also have my eyes on some other ASX dividend shares for the potential of income.
