If you’re looking for dividend shares to buy to combat inflation then you may want to look at the ones below that brokers are recommending.

Here’s what the brokers are saying about these ASX dividend shares:

Adairs Ltd (ASX: ADH)

The first ASX dividend share that could be a top option is Adairs.

It the leading furniture and homewares retailer behind the Focus on Furniture, Mocka, and eponymous Adairs brands.

While the company has been underperforming in FY 2022 due to COVID headwinds, it has been tipped to bounce back strongly by analysts at Morgans. In light of this, the broker believes the market is undervaluing its shares and has put an add rating and $3.50 price target on its shares.

Morgans recently commented: “In FY23, we expect Focus to have bedded down and to have started a strategy of improving store economics while expanding its footprint. We expect the NDC [national distribution centre] to be up and running and delivering efficiencies. We expect Mocka to be making its first steps towards an omni-channel strategy. These factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple. ADD.”

As for dividends, the broker is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.79, this will mean yields of 6.8% and 9.3%, respectively, over the next couple of years.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share for investors to look at is banking giant NAB.

It could be a top option for investors that are looking to gain exposure to the banking sector. Particularly given its strong position in business banking, the recent acquisition of digital bank 86 400, and the proposed acquisition of Citigroup’s Australian consumer business.

The team at Bell Potter expect the aforementioned acquisitions to allow the bank to “achieve scale in digital and consumer banking offerings.” It is partly for this reason that the broker has a buy rating and $34.50 price target on the bank’s shares at present.

In addition, the broker is forecasting fully franked dividends per share of 136.5 cents in FY 2022 and then 134.5 cents in FY 2023. Based on the current NAB share price of $32.20, this equates to yields of 4.2% and 4.1%, respectively.

The post 2 inflation-busting ASX dividend shares that brokers are tipping as buys appeared first on The Motley Fool Australia.

More reading

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• 2 cheap ASX shares to buy in May: Experts
• Why is the NAB share price beating the other ASX 200 banks in April?
• Beat inflation with these ASX dividend shares that analysts rate as buys

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 ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. 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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The Flight Centre Travel Group (ASX: FLT) share price has been struggling over the past three trading days.

Flight Centre shares have fallen 4.2% since the market close on Thursday 21 April to $21.72. In today’s trade, the Flight Centre share price slid 0.05%. For perspective, the S&P/ASX 200 Index (ASX: XJO) dropped 0.78%.

In recent days, Flight Centre has shared insights into the impact of COVID-19 on the company’s financial performance. Let’s take a look at what Flight Centre had to say.

‘Significant impact’

COVID-19 may “continue to adversely” affect Flight Centre for the foreseeable future, the airline noted in a prospectus for the issue of unsecured notes signed off by CEO Graham Turner on Friday.

Commenting on the ‘financial risk’, the report stated:

The COVID-19 pandemic has resulted in a significant short term impact and is expected to have a very significant medium to long term impact on the issuer’s business and operations and in particular, the demand for its services, which has reduced visibility on future earnings and cash flows, and has led to a material decline in revenues.

Flight Centre noted the high number of cancellations places “significant strain” on the company’s cash flows. Events cited in the report that could impact the tourism industry included wars, nuclear threats, terrorist attacks, floods, earthquakes, COVID-19, SARS, or any other disease.

However, today, Flight Centre presented a much more positive outlook in a Morgans roundtable presentation.

Flight Centre said it is “on the path to recovery”. Customers have been queuing outside Flight Centre shops since COVID-19 restrictions were lifted.

Flight Centre added that visits to friends and relatives are underpinning the international travel rebound. The company added: “Consultant productivity currently well above historic levels – looking to immediately recruit 500 leisure travel advisors globally to meet current and future demand.”

Flight Centre continues to be among the most shorted ASX shares, as my Foolish colleague James noted yesterday. The consensus broker position on Flight Centre is hold, according to a report on nabtrade.

Flight Centre share price snapshot

The Flight Centre share price has soared by 26% over the past year. It has ascended 16% this year to date. For perspective, the benchmark index has returned nearly 4% over the past year. In the past month, Flight Centre shares have jumped by more than 13%.

The company has a market capitalisation of about $4.34 billion.

The post How long will the Flight Centre share price keep getting battered by COVID-19? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• How do you value the Flight Centre share price in April 2022?
• The Flight Centre share price just surged to a 6-month high. Here’s why
• Why are ASX 200 travel shares taking off on Wednesday?
• Here are the 5 best performing ASX travel shares of 2022 so far

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 Flight Centre Travel 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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Now that we are getting towards the business end of April, it might be a good chance to take stock and check out the Westpac Banking Corp (ASX: WBC) share price.

As a big four ASX 200 bank, Westpac is one of the largest and most widely-held ASX shares on the market.

So as it currently stands, Westpac shares closed on Wednesday trading at $23.45 each, down a nasty 1.88% for the day. This places the Westpac share price 8.26% higher so far in 2022, a significant outperformance of the S&P/ASX 200 Index (ASX: XJO).

But over the past 12 months, Westpac’s performance hasn’t been quite as impressive. Since April 2021, Westpac shares have lost 7.31% of their value. The bank is still well in the red over the past five years, too, having gone backwards by a significant 33% or so over this period.

So that might lead some investors to wonder if the Westpac share price is cheap or expensive right now.

Are Westpac shares cheap compared to the other ASX 200 banks?

Well, let’s see how this ASX 200 bank is being priced compared to its peers. The price-to-earnings (P/E) ratio is a useful metric to employ when comparing the valuations of mature companies in the same sector.

Right now, Westpac shares have a P/E ratio of 17.57, meaning that investors are willing to pay $17.57 for every $1 of earnings the bank brings in. This tells us that, on a raw dollar-to-dollar earnings comparison, investors are valuing Westpac shares at a higher price than Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ shares currently trade with a P/E ratio of 13.53.

However, investors are giving Westpac shares an almost identical premium to fellow bank National Australia Bank Ltd (ASX: NAB). NAB currently has a P/E ratio of 17.61, just a tad higher than Westpac’s own.

But Westpac can’t shine a light on Commonwealth Bank of Australia (ASX: CBA) shares. CBA commands a clear premium for ASX bank investors. In CBA’s case, investors are willing to pay $19.80 for every $1 of CBA’s earnings.

So right now, Westpac shares are cheaper than CBA and NAB on a P/E ratio basis but more expensive than ANZ.

The post Is the Westpac share price expensive in April? appeared first on The Motley Fool Australia.

More reading

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• Own CBA shares? Meet the big bank’s new chair
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
• Why is the NAB share price beating the other ASX 200 banks in April?
• Own ANZ shares? Here’s what this top broker finds ‘particularly concerning’

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. 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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Inflation is now the word of the day. Today, Australian CPI was printed at 5.1% for the three months until 31 March 2022.

It doesn’t appear the market has taken the news very well. The benchmark S&P/ASX 200 Index (ASX: XJO) is down 63 basis points at the time of writing.

As commodity markets continue to boom and food prices look set for a green period, market pundits are positioning to avoid the fallout of rising inflation.

What shares do well in inflationary periods?

Inflation can be a real pain to investors. Especially at the retail end because it has a direct impact on investment returns.

Returns are measured in nominal and real terms, with the latter accounting to adjust for inflation. Put simply, inflation eats into real savings and investment gains by reducing purchasing power.

“Inflation poses a threat to investors because it chips away at real savings and investment returns,” according to analysis from fixed-income giant Pimco.

Most investors aim to increase their long-term purchasing power. Inflation puts this goal at risk because investment returns must first keep up with the rate of inflation in order to increase real purchasing power.

For example, an investment that returns 2 per cent before inflation in an environment of 3 per cent inflation will produce a negative return (-1 per cent) when adjusted for inflation.

Going to the archives, research analysts at JP Morgan have uncovered some interesting findings.

Curiously, investigations by the broker reveal that materials, industrials and financials sectors each demonstrate strength when consumer expectations of inflation rise. Whilst more growth-type assets flounder.

“Cyclical sectors such as financials, industrials, materials and energy, tend to outperform the global benchmark in periods of rising inflation expectations,” the broker wrote.

By contrast, defensives and growth stocks tend to struggle. Technology is the sector that looks most vulnerable today, given their valuations have likely benefitted from the low interest rates and flat yield curves over the past couple of years.

Pimco suggests the same, noting that “[m]any commodity-based assets, such as commodity indexes, can help cushion a portfolio against inflation because their total returns usually rise in an inflationary environment.”

What instruments are out there?

Along those lines, the BetaShares Global Energy Companies ETF (ASX: FUEL) offers investors diversified exposure to the energy sector. Meanwhile, the BetaShares Global Banks ETF (ASX: BNKS) lends the same, albeit in financials.

For global ‘inflation-protected’ exposure, the Fidelity Stocks for Inflation ETF (BATS: FCPI) might pique investor interest. It’s an index fund that tracks the Fidelity Stocks for Inflation Factor Index.

According to S&P Global:

[The] Fidelity Stocks for Inflation Factor Index is designed to reflect the performance of stocks of large- and mid-capitalization U.S. companies with attractive valuations, high quality profiles, and positive momentum signals, with structural tilts to sectors that tend to outperform in inflationary environments.

Some of the top holdings include Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Marathon Oil Corporation (NYSE: MRO).

As the investment landscape keeps evolving, it appears these baskets are poised to perform amid the inflationary pressures. But only time will tell.

The post Which ASX 200 shares have historically performed well during rising inflation? appeared first on The Motley Fool Australia.

More reading

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• Have ASX tech shares finally reached the bottom?
• The world’s most valuable companies from 2000 to 2022
• 3 high quality ETFs for ASX investors to buy today
• Looking for dividend shares outside mining and banking? Read this

Motley Fool contributor Zach Bristow owns Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple, BetaShares Global Banks ETF – Currency Hedged, BetaShares Global Energy Companies ETF – Currency Hedged, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. 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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