This article is about three ASX dividend shares that offer solid yields today and have a good chance of growing the dividend into future years.
Here they are:
Magellan Financial Group Ltd (ASX: MFG)
Magellan is a large fund manager in Australia. It is now managing around $118 billion of capital for investors across strategies relating to international shares, infrastructure shares and Australian shares.
The ASX dividend share can use the very scalable business model it has to pay out more than 90% of its profit as a dividend without hurting growth. It hardly takes any more capital to manage $118 billion compared to $117 billion.
In FY22, Magellan is expected (according to CommSec numbers) to pay a total dividend of 237 cents per share. That suggests a partially franked dividend yield of 5.5%. As FUM goes higher, that should lead to stronger profits and even bigger dividends from the ASX dividend share.
External investments like Guzman y Gomez adds very useful diversification to the business.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is one of the leading listed investment companies (LICs). Not only is it one of the biggest LICs but it has also been one of the best over the last decade. In the last few years it decided to start steadily growing the dividend. It has a plan to reach an annual payout of 10 cents per share in the next couple of years. That translates to a forward fully franked dividend yield of 3.4%.
There are high quality global names in the portfolio like Visa, Mastercard, Amazon, Home Depot, Facebook, Alphabet and Microsoft. These are the types of names that are likely to keep growing earnings for a long time to come.
It’s also valued at a nice 12% discount to the latest weekly pre-tax net tangible assets (NTA) per share of $3.382.
The annual costs of this ASX dividend share are low and getting lower as a percentage of the portfolio because those costs are largely fixed.
Pengana Capital Group Ltd (ASX: PCG)
This is another fund manager that offers a wide array of investment strategies for investors including global shares, Australian shares, ethical shares, private equity and property.
FUM has been steadily growing in 2021 and I think its initiatives are working to both improve performance and attract investors. FUM is now $4 billion.
In FY21, Pengana saw underlying profit before tax rise 69.6% to $21.2 million and underlying profit/earnings per share (EPS) increased 77% to 14.2 cents. This funded a 63% increase of the annual dividend to 13 cents per share. The FY21 dividend represents a fully franked dividend yield of 6.8%.
If Pengana can keep growing its FUM and launching more funds then the underlying profit can continue to rise, making it a solid ASX dividend share.
