There are plenty of ASX dividend shares that everyone knows. But there are also some ideas that may be underrated for income potential.

Names like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are two of the biggest dividend payers in the country.

But these two are also expected to pay sizeable dividends in FY22 and beyond:

JB Hi-Fi Limited (ASX: JBH)

This company is one of the largest retailers in Australia with its networks of JB Hi-Fi stores and The Good Guys stores. It sells a wide range of products like computers, smartphones appliances and so on. Whilst this is often seen as discretionary spending, they are widely accepted as essential items to living in 2022.

The ASX dividend share is expected by the broker Credit Suisse to pay a grossed-up dividend yield of 7.4% in FY22.

JB Hi-Fi’s second quarter of FY22 showed sales growth of 1.2% for JB Hi-Fi Australia and 2.8% growth for The Good Guys. The company is expecting to report net profit after tax (NPAT) of $287.9 million – that would be a year-on-year decline of 9.4%, but up 68.8% over two years.

The company points to five unique competitive advantages – scale, a low-cost operating model, quality store locations, supplier partnerships and multichannel capability (which includes booming online sales).

Credit Suisse thinks the JB Hi-Fi share price is valued at 13x FY22’s estimated earnings.

Metcash Limited (ASX: MTS)

Metcash is one of the largest suppliers to independent supermarkets and liquor stores. Some of the liquor retailers it supplies includes Cellarbrations, The Bottle-O, IGA Liquor, Duncans, Thirsty Camel, Big Bargain and Porters. The supermarkets it supplies include the IGA and Foodland brands.

The ASX dividend share also has a few hardware businesses, including Mitre 10, Home Timber & Hardware and Total Tools. This hardware division is the segment that’s driving profit. The FY22 half-year result saw group earnings before interest and tax (EBIT) rise by 13.9% to $231.2 million. But the hardware EBIT jumped 53.3% to $98.9 million.

Metcash is working on a number of things to grow its profitability including improving its efficiencies, investing in distribution centres and advancing its digital sales. In HY22 it made around $60 million of online sales, up 46% year on year.

In terms of the dividend, the board has committed to a target dividend payout ratio of around 70% of underlying profit after tax. Metcash says that it has a strong focus on shareholder returns. The interim dividend was grown by 31% to 10.5 cents per share.

It’s currently rated as a buy by Credit Suisse, with a price target of $4.55. On the FY22 numbers projected by the broker, Credit Suisse reckons the Metcash share price is valued at 14x FY22’s estimated earnings with a grossed-up dividend yield of 6.9%.

The post 2 strong ASX dividend shares hiding in plain sight appeared first on The Motley Fool Australia.

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• Have your cake and eat it: These ASX shares have been paying regular dividends whilst growing their share prices
• Could this be the biggest issue faced by ASX retail shares heading into earnings season?

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 no position in any of the stocks mentioned. 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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If you’re a Westpac Banking Corp (ASX: WBC) shareholder, you may be planning to take part in its enormous $3.5 billion off-market share buyback.

The good news is that the banking giant has now released the market price for the share buyback.

Westpac share buyback price settled

According to the release, the market price for the Westpac share buyback is $22.2387.

The release explains that the market price was determined by the volume-weighted average price (VWAP) of its shares over the five trading days up to and including Friday, 11 February 2022.

However, it is worth noting that the market price is not necessarily the price that it will be buying back shares. Depending on demand, Westpac will be buying back its shares at either no discount or at a discount as great as 10%. The latter would equate to a buyback price of $20.01. This compares to the current Westpac share price of $22.78.

But don’t worry if the buyback price is lower than the current Westpac share price. That’s because, for Australian tax purposes, the buyback is expected to comprise a capital component of $11.34 per share, with the remainder deemed to be a fully franked dividend. This means that even with a 10% discount, shareholders should still be getting a better deal than if they sold them on-market.

Why is Westpac returning funds in this way?

Westpac has previously explained why it chose to return $3.5 billion to shareholders via an off-market buyback instead of other options.

It explained: “Westpac evaluated several options for returning capital to Shareholders. We believe that this Buy-Back will benefit all Westpac Shareholders. An off-market buy-back is considered an effective method to return capital and franking credits and optimise our capital structure at this time. It enables a higher number of Shares to be bought back in a shorter timeframe and it reduces our Share count faster than an on-market buy-back of Shares. In turn, a lower capital base and Share count supports Westpac’s future Return on Equity, Earnings per Share and Dividend per Share, all things being equal.”

Westpac expects to reveal the final price of the buyback on Monday. After which, payments to shareholders for the shares bought back will commence on 18 February 2022.

The post What Westpac (ASX:WBC) shareholders need to know about its $3.5bn buyback appeared first on The Motley Fool Australia.

More reading

• Why IAG, Rio Tinto, Unibail, and Westpac shares are pushing higher
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• ‘Future-ready’: Westpac (ASX:WBC) share price lifts following Microsoft partnership

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 Westpac Banking Corporation. 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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Some of the most attractive ASX shares on the stock exchange could be ones that have lower valuations. Value investors could love the two cheap ASX shares in this article.

Businesses with low price/earnings ratios (P/E ratios) don’t have much long-term growth expectation built into them. They can also offer above-average dividend yields, depending on the dividend payout ratio.

With that in mind, here are two cheap ASX share ideas:

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is an ASX retail share that sells male and female personal grooming products and wants to be the market leader in all things related to hair removal. There are currently more than 120 stores around Australia and New Zealand. It also sells other retail products relating to oral care, hair care, massage, air treatment and beauty categories.

Despite all of the lockdowns in the first half of FY22, the company managed to achieve impressive online sales growth to make up for it. In FY22 to 7 November 2021, total sales only fell 0.9% with total online sales jumping 58.6% year on year. It was a 329.4% improvement against FY20. In FY21, it fulfilled 2.4 million customer transactions.

The company has a number of different growth plans including growing the number of returning customers, growing its brand awareness, expanding into new categories, opening new stores and driving operational efficiency. The company is proud of its customer satisfaction, with a net promoter score (NPS) of 89.1 out of 100.

The cheap ASX share is currently rated as a buy by Ord Minnett, with a price target of $1.25. On the broker’s projected FY22 numbers, the Shaver Shop share price is valued at 9x FY22’s estimated earnings with a grossed-up dividend yield of 10%.

Bapcor Ltd (ASX: BAP)

Bapcor is an auto parts business that is the leading player in the sector, with a number of different brands like Autobarn, Burson, Truckline and Midas.

The business just reported its FY22 half-year result which showed “solid financial performance” including continued revenue growth despite all of the impacts of the lockdowns during the period. The opening up of Melbourne and Sydney led to the second quarter revenue increasing materially compared to the first quarter of FY22.

In summary, Bapcor reported that HY22 revenue grew by 1.9% to $900.1 million and net profit after tax (NPAT) rose 14.7% to $57.7 million. The interim dividend was grown by 11.1% to 10 cents per share.

It has plans to grow in a number of areas. One tactic is to grow its store networks across Australia and New Zealand. It’s planning to become more efficient with its distribution centres. Bapcor wants to expand in Asia with both Tye Soon and building its own Burson network in Asia.

The cheap ASX share also wants to ‘realise’ operational efficiencies and expand its own brand product range (which has a higher gross profit margin).

Ord Minnett rates the company as a buy, with a price target of $8.60. Ord Minnett is expecting the auto parts business to be able to achieve stronger margins and good growth in Asia over time.

On the broker’s numbers for FY22, the Bapcor share price is valued at 18x FY22’s estimated earnings with a grossed-up dividend yield of 4.4%.

The post 2 cheap ASX shares value investors shouldn’t miss appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why Bapcor, Mineral Resources, Nanosonics, and Syrah shares are falling today
• Down but not out: Bapcor (ASX:BAP) share price slumps on sluggish first half
• Are these 2 industry-leading ASX shares too good to ignore and now buys?
• 2 ASX shares with growing fully franked dividends

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 Bapcor. 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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There are a growing number of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

Three that could be worth getting better acquainted with next week are listed below. Here’s what you need to know about them:

BetaShares Cloud Computing ETF (ASX: CLDD)

With the world rapidly moving to the cloud, companies with exposure to cloud computing look well-placed for growth over the next decade. This could make the BetaShares Cloud Computing ETF worth a look. This ETF aims to track the performance of the Indxx Global Cloud Computing Index, which includes leading global companies involved in the delivery of computing services, servers, storage, databases, networking, software, analytics and other services over the internet. Through this ETF, you’ll be buying a slice of companies such as Dropbox, Netflix, Shopify, and Zoom.

BetaShares Crypto Innovators ETF (ASX: CRYP)

The BetaShares Crypto Innovators ETF could be worth looking at if you’re interested in the high risk world of cryptocurrencies. The fund manager notes that the ETF allows investors to access the growth potential of the crypto economy through exposure to a portfolio of companies at the forefront of the crypto world. This includes crypto trading platforms, crypto mining and mining equipment firms, and other companies servicing crypto-markets. Among its holdings you’ll find Coinbase, Silvergate, and Riot Blockchain.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for investors to look at next week is the Vanguard MSCI Index International Shares ETF. This ETF provides investors with easy access to the world’s largest listed companies. Vanguard notes that this allows investors to take part in the long term growth potential of international economies. Among the ~1,500 companies included in the ETF are Apple, Johnson & Johnson, JP Morgan, Nestle, Procter & Gamble, and Visa.

The post 3 exciting ETFs for ASX investors next week appeared first on The Motley Fool Australia.

More reading

• Why Vanguard MSCI Index International Shares and this ETF could give your portfolio a boost
• 2 market-beating ETFs for ASX investors in January
• Shopping for some new ASX ETFs in 2022? Here’s what you need to know
• Is the Vanguard MSCI Index International Shares ETF (ASX:VGS) the most diversified ETF on the market?

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. owns and has recommended Betashares Crypto Innovators ETF and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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