The ASX dividend stock Charter Hall Long WALE REIT (ASX: CLW) has suffered a 27% drop since 22 April 2022, which has boosted the potential distribution yield.
When the share price of a business falls, it increases the passive income yield by that amount.
For example, if a business had a 6% distribution yield and the share price fell by 10%, then the yield is boosted by 10% – that means the yield becomes 6.6%. A 20% decline would make the dividend yield 7.2%. And so on. As I've mentioned, the Charter Hall Long WALE REIT unit share price has fallen 27% from 22 April 2022.
Amid the current decline, I think this is a good time to look at the ASX dividend stock for a few reasons.
This real estate investment trust (REIT) is very diversified with a presence across hospitality (hotels), government-tenanted offices, data centres and telecommunications, service stations, grocery and distribution, food manufacturing and waste and recycling management.
I think it's a good thing the business is diversified because it means the rental income isn't reliant on one sector and it also gives it numerous opportunities to expand in whichever sector it can find the best returns for unitholders.
Following the recent decline of the Charter Hall Long WALE REIT, the distribution yield has been boosted.
It's expecting to pay a distribution of 25 cents per unit in FY25, which translates into a distribution yield of 6.3%.
While that's not the biggest distribution yield on the ASX, I think it's at an attractive level, particularly if it grows in the future because of rental growth. In the FY25 first-half result, its net property income (NPI) like-for-like growth was 3.5%.
One of the main attractions of this ASX dividend stock is that its tenants are signed on for the long-term. This gives the business an appealing weighted average lease expiry (WALE), which tells investors how long, on average, its rental income is locked in for.
Some of the main tenants across its portfolio include Endeavour Group Ltd (ASX: EDV), Australian government entities, Telstra Group Ltd (ASX: TLS), BP, Metcash Ltd (ASX: MTS) and Coles Group Ltd (ASX: COL).
At the end of the HY25 result, it had a WALE of 9.7 years, which I think is a strong level.
Overall, I think this ASX dividend stock offers a lot of what income-seekers may want, particularly if interest rates come down further in Australia.
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