Top ASX passive income shares to buy in June

Top ASX passive income shares to buy in June

Winter has officially arrived! It’s time to snuggle in and batten down the hatches. Who doesn’t love the thought of keeping the home fires burning with some passive income rolling in every month? It’s also time to celebrate the last month of the financial year, so if you’ve been basking in the warm possibility of earning more and working less, then read on!  We asked our Foolish writers which ASX income shares they reckon could be worth hibernating with right now. Here is what the team came up with: 7 best ASX passive income shares for June 2023 (smallest to largest) Rural Funds Group (ASX: RFF), $696.59 million Centuria Industrial REIT (ASX: CIP), $2.01 billion Harvey Norman Holdings Limited (ASX: HVN), $4.19 billion Treasury Wine Estates Ltd (ASX: TWE), $8.24 billion Transurban Group (ASX: TCL), $45.04 billion Woodside Energy Group Ltd (ASX: WDS), $65.60 billion National Australia Bank Ltd (ASX: NAB), $80.95 billion (Market capitalisations as of 2 June 2023). Why our Foolish writers love these ASX passive income stocks Rural Funds Group What it does: Owning and managing more than $1.6 billion worth of assets, Rural Funds Group is a real estate investment trust (REIT) that holds a diverse range of agricultural assets across Australia. The investment trust makes money by leasing its assets to established operators. By Mitchell Lawler: When it comes to passive income, two factors are critically important:  The source should be established enough to provide a relatively consistent flow of funds; and It should have some component of inflation protection to prevent devaluation. In my opinion, Rural Funds Group delivers on both of these requirements.  Dividends per share have steadily grown over the years, rising from 4 cents per unit in 2014 to 11.7 cents per unit in 2022. Secondly, 30% of the trust’s leased portfolio is CPI linked, with another 29% subject to market reviews. Furthermore, the weighted average lease expiry currently sits at 12.3 years as of 31 December 2022. That provides a level of predictability that this source of passive income will continue to flow for years to come. The trust currently offers a dividend yield of 6.5%, which is only 0.3% below the latest annual inflation rate. Motley Fool contributor Mitchell Lawler does not own shares in Rural Funds Group. Centuria Industrial REIT What it does: Centuria’s Australia’s largest domestic pure-play real estate investment trust (REIT). It owns a portfolio of industrial properties that are located in urban infill locations throughout the country. By Tristan Harrison: The REIT says that it has a quality and diverse tenant base. This should be useful considering the ongoing economic uncertainty, so that should be supportive for rental earnings. Another positive is the strong demand and low volume levels of new supply of industrial space. The business had a 98.5% portfolio occupancy at the end of the FY23 third quarter. This demand helped Centuria achieve a 28% positive re-leasing spread in the FY23 year to date (compared to prior passing rents), demonstrating “accelerating market rental growth”. Strong demand and rental performance should be helpful for distributions and for supporting property valuations, even as interest rates go up. It expects to pay a total FY23 distribution per unit of 16 cents, which is a yield of 5%. Motley Fool contributor Tristan Harrison does not own shares of Centuria Industrial REIT. Harvey Norman Holdings Limited What it does: Harvey Norman is behind a franchise of furniture, entertainment, home goods, and technology stores spread across Australia and the world. The company also boasts a substantial property portfolio. By Brooke Cooper: The Harvey Norman share price has been down in the dumps lately, falling 20% over the last 12 months. But there’s a silver lining. The tumble sees the ASX consumer discretionary stock boast an 8.79% dividend yield. The retail share has been falling amid high inflation and rising interest rates. And while I wouldn’t be surprised if it fell a bit more in the near term, I think it could make a great long-term passive income buy. I’m not alone in thinking so. Goldman Sachs tips the company to offer 36 cents of dividends per share this financial year and 30 cents per share next. Considering its current share price, that would see its yield sitting at 10.35% and 8.63% in the coming years. Motley Fool contributor Brooke Cooper does not own shares of Harvey Norman Holdings Limited. Treasury Wine Estates Ltd What it does: Treasury Wine Estates is one of the world’s largest wine companies. It owns a collection of popular brands such as 19 Crimes, Penfolds, and Wolf Blass. By James Mickleboro: I think that wine giant Treasury Wine Estates could be a top ASX dividend share to buy in June. Particularly given the sizeable pull-back in its share price in May following a softer-than-expected trading update. I believe this share price weakness has left the shares of a high-quality company with moat-like qualities trading at a very attractive level (21x estimated FY24 earnings) for long-term-focused investors.   And with Goldman Sachs forecasting fully franked dividends per share of 35 cents in FY23, 39 cents in FY24, and 44 cents in FY25, this will mean attractive growing yields of 3%, 3.35%, and 3.8%, respectively. Another positive is the potential upside on offer with its shares. For example, Goldman has a buy rating and $14.20 price target on them. Motley Fool contributor James Mickleboro does not own shares in Treasury Wine Estates. Transurban Group What it does: Transurban is one of the world’s largest toll-road operators. By Bronwyn Allen: Transurban recently upgraded its dividend guidance for FY23 to 58 cents per share, which represents a 40%-plus increase on its FY22 payout. Investors received an interim dividend of 26.5 cents in February, so the next one in August should be 31.5 cents if the company’s forecasts are accurate. It’s not surprising that the dividend is going up given Transurban’s ‘products’ (i.e., toll roads) weren’t used as much during the COVID-19 pandemic, thereby affecting income. But the new guidance is higher than expected. Based on the Transurban share price of $14.62, the forward dividend yield is now 3.59%. Motley Fool contributor Bronwyn Allen does not own shares in Transurban Group. Woodside Energy Group Ltd What it does: Woodside Energy is Australia’s largest oil and gas company with operating assets in Australia and internationally. By Bernd Struben: In their outlook for Aussie dividends, Janus Henderson analysts noted, “In Q2, large oil dividends will make up some of the gap left by the mining sector.” And I think Woodside will do just that. Over the past 12 months, Woodside paid out a record interim and record final dividend, both fully franked. Spurred by record full-year after-tax profits of US$6.5 billion, Woodside delivered a total of $3.75 per share of passive income. At the current share price of $34.55, that equates to a trailing yield of 10.87%. Granted, that came with higher oil prices. But with crude oil now trading near one-year lows, much of that is already reflected in the share price. Following last year’s successful merger with BHP’s petroleum business, I believe Woodside is well-placed to continue delivering outsized passive income. Motley Fool contributor Bernd Struben does not own shares in Woodside Energy. National Australia Bank Ltd What it does: As one of Australia’s big four banks, NAB is a share that needs little introduction. It is now the second-largest bank on the ASX, with a major presence in the Australian financial landscape. By Sebastian Bowen: I view NAB as one of the top bank shares on the ASX. Since CEO Ross McEwan took over a few years ago, NAB has gone from strength to strength and maintains dominance of the business lending corner of the market. What attracts me to NAB shares right now is the bank’s recent drop in value. Since early February, the NAB share price has plunged by almost 19%. This has resulted in the NAB dividend yield (fully franked of course) rising above 6%.  That’s far more yield than you can get with one of the bank’s term deposits or savings accounts. As such, I think NAB is a great place to look for passive income on the ASX share market right now.  Motley Fool contributor Sebastian Bowen owns shares in National Australia Bank.

https://www.fool.com.au/2023/06/04/top-asx-passive-income-shares-to-buy-in-june/

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