2 great value ASX dividend shares that brokers love

Key points

• The two ASX dividend shares in this article have attractive prospective dividend yields and potential share price growth on the cards
• Healius continues to offer essential healthcare services and COVID testing, whilst adding to its business operations with acquisitions
• JB Hi-Fi continues to see elevated sales and profitability, helping the bottom line and underpin solid dividend expectations

Brokers are always on the lookout for ASX shares that they think look good value. Sometimes, they find ASX dividend shares that may also offer attractive share price upside.

Businesses that are good value and have solid dividend yields may be able to provide investors with attractive total returns over the next 12 months and beyond.

With that in mind, here are two potential options:

Healius Ltd (ASX: HLS)

Healius is one of the larger healthcare businesses on the ASX with a market capitalisation of $2.8 billion according to the ASX.

What does Healius do? It has three divisions – pathology, imaging and day hospitals.

It’s currently rated as a buy by at least four different brokers including Macquarie. The broker has a price rating on the business of $5.45. That implies a potential rise of the Healius share price of more than 20% over the next year.

The broker thinks that Healius can continue to benefit from COVID-19 testing for a couple of years.

In terms of the dividend, Macquarie thinks that Healius could pay a grossed-up dividend yield of 9.5% in FY22 and 5.1% in FY23 (as earnings normalise).

Healius recently announced a sizeable acquisition to bolster its earnings. It’s buying leading bioanalytical laboratory, Agilex Biolabs for an enterprise value of $301.3 million. This business provides bioanalysis to meet the clinical trial needs of biotech and pharmaceutical companies.

The ASX dividend share thinks of this as a long-term acquisition, giving it a platform for growth into the global clinical trials sector and a structurally attractive, higher growth, higher margin healthcare sector.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the largest retailers in Australia (and New Zealand) specialising in the sale of electronics and home appliances.

It’s currently rated as a buy by at least four brokers including Credit Suisse, which has a price target of $58.80 on the business. That suggests a potential upside of more than 20% over the next year, if the broker is right.

In terms of dividend expectations, Credit Suisse reckons that the ASX dividend share is going to pay a grossed-up dividend yield of 7.8% in FY22 and 6.2% in FY23.

The broker reckons that JB Hi-Fi’s sales are going to be stronger for longer.

The business recently revealed its FY22 half-year update, showing that sales were only down by 1.6% to $4.86 billion year on year. There was continued heightened demand for both consumer electronics and home appliance products. Online sales were $1.1 billion, up 62.6% on last year, representing 22.7% of total sales.

However, net profit after tax (NPAT) was down 9.4% year on year to $287.9 million. But compared to the first half of FY20, net profit was up 68.8% thanks to significant operating leverage driven by the elevated sales growth, management of gross margins and disciplined cost control.

The post 2 great value ASX dividend shares that brokers love appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. 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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