With interest rates likely to remain low for some time to come, the yields on the ASX dividend shares listed below could be even more attractive than normal for income investors.
Here’s what you need to know about these dividend shares that a leading broker has rated as buys:
Adairs Ltd (ASX: ADH)
The first ASX dividend share to look at is Adairs. It is a leading retailer of homewares and home furnishings in Australia and New Zealand through both retail stores and online channels.
It has been in fine form in FY 2021 thanks to heightened sales during the pandemic. This led to the company recently reporting a 28.5% increase in sales to $499.8 million. And thanks to margin expansion, Adairs’ underlying earnings before interest and tax (EBIT) almost doubled to $109.1 million. This allowed Adairs to increase its dividend to 23 cents per share.
And while it will be very hard for Adairs to outperform this in FY 2022, it has started the year strongly.
The team at Morgans are positive on the company. Last week the broker upgraded its shares to an add rating with a $4.20 price target. Morgans is also forecasting fully franked dividends per share of 22 cents in FY 2022 and 27 cents in FY 2023.
Based on the current Adairs share price of $3.73, this will mean yields of 5.9% and 7.2%, respectively.
Coles Group Ltd (ASX: COL)
This supermarket giant could be a dividend share to consider buying. Coles has just handed in a solid full year result for FY 2021.
For the 12 months ended 30 June, the company reported sales revenue growth of 3.1% to $38,562 million and net profit after tax growth of 7.5% to $1,005 million. The latter was a touch ahead of the market’s expectations. This allowed Coles to increase its full year dividend by 6% to a fully franked 61 cents per share.
Morgans is also feel bullish about Coles. In response to its full year results, the broker retained its add rating and lifted its price target to $19.80. It is now forecasting dividends of 61 cents per share in FY 2022 and then 62 cents per share in FY 2023.
Based on the current Coles share price of $17.89, this represents yields of 3.4% and 3.5%, respectively.
The post 2 excellent ASX dividend shares analysts rate as buys appeared first on The Motley Fool Australia.
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More reading
- Why is the Coles (ASX:COL) share price down 5% this week?
- How does the Woolworths (ASX:WOW) earnings result compare to Coles (ASX:COL)?
- Coles (ASX:COL) share price slides amid $1.3 billion sustainability refinancing
- Telstra (ASX:TLS) and this dividend share have been named as buys
- Why the Coles (ASX:COL) share price has underperformed the ASX 200 in the last year
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO and COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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