Sun. Dec 5th, 2021

man handing over a pile of cash representing ASX retail capital returns

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S & P / ASX 200 Index (ASX: XJO) stocks could be a great place to find dividend income opportunities.

There are more blue chips out there that are able to pay big dividends than just Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Telstra Corporation Ltd (ASX: TLS).

Some ASX 200 dividend stocks expect long-term profit growth and dividend increases:

APA is a major gas pipeline owner. It is currently rated as a purchase of Morgans with a price target of $ 9.98.

Morgans is attracted to the fact that the APA has contracts linked to CPI inflation, which means that the current high level of inflation can help the company.

APA has grown its distribution every year for the past decade and a half, driven by growing operating liquidity as more energy projects come online.

In FY22, the ASX 200 dividend stock expects to grow its distribution by a further 3.9% to 53 cents per share. securities. At the current APA share price, this translates into a distribution dividend of 5.5%. Morgans expects that the distribution per. unit will rise again in FY23 to $ 0.55 per unit. securities.

The APA recently acquired part of Basslink’s debt, which owns and operates the 370km high-voltage DC link between Victoria and Tasmania. It provides two-way access to 500 MW of electricity and is “critical” to Tasmania’s renewable energy exports to mainland Australia. APA wants to buy Basslink.

The energy infrastructure company wants to expand its electric transmission footprint and invest in renewable energy sources. The company sees many billions of dollars of opportunities to invest in Australia (and the US) in electricity transmission and renewable energy production in the future.

The APA has said there is potential for its existing pipelines to be recycled to hydrogen (full or mixed). This can hedge the assets of the ASX 200 dividend stock in the future.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a large fund manager listed on ASX.

It is currently rated as a purchase by the brokers Macquarie Group Ltd (ASX: MQG).

Excluding the profit dividend, Magellan’s ordinary dividend continues to increase. Before FY23, Macquarie expects Magellan’s annual dividend to rise to $ 2.40 per share. That would translate to a partially franked dividend of 7%.

While underperformance of its global equity strategy has led to a negative sentiment, Macquarie believes that the dividend yield and cheaper price / earnings ratios make it seem attractive.

On Macquarie’s figures, the Magellan share price is valued at 13x FY23’s estimated earnings.

The ASX 200 dividend ratio reported that its total assets under management (FUM) increased by $ 1.5 billion to $ 114.8 billion in October 2021.

Magellan also feels confident in some of its external investments, including Guzman y Gomez and Barrenjoey.

GYG is a fast-moving Mexican food chain with global operations in Australia, Singapore, Japan and the United States. It had 158 restaurants at the last count with plans for 30 in the next year alone.

Barrenjoey is a new local investment bank that is already profitable, with revenue tracking exceeding expectations. Magellan said it is “very likely that Barrenjoey will become very valuable to Magellan over time”.

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