2 buy-rated ASX dividend shares for income in 2022

A woman sits at her computer with hand to mouth and a contemplative smile on her face although she is considering or thinking about information she is seeing on the screen.

A woman sits at her computer with hand to mouth and a contemplative smile on her face although she is considering or thinking about information she is seeing on the screen.

There are some interesting ASX dividend shares that could be ideas for income in 2022 and beyond.

The ASX share market has gone through much volatility this year. Inflation is currently relatively high, which is impacting market thoughts on where interest rates are headed.

This volatility has sent the valuation of some businesses down, which has pushed up the dividend yield of some ASX dividend shares, like these two:

Beacon Lighting Group Ltd (ASX: BLX)

Most readers may know Beacon for its lighting retail stores. It also services trade customers. Beacon Lighting has an e-commerce offering for customers and it has a growing international division.

It’s currently rated as a buy by the broker Citi with a price target of $3. That implies a potential rise of around 50%. However, it acknowledged that a rise in interest rates and a slowdown in household spending could hurt sales. Despite that, Citi believes that Beacon has long-term growth potential.

According to Citi, Beacon has a projected grossed-up dividend yield of 6% in FY23.

Beacon Lighting’s profit margins continue to climb. In the recent FY22 half-year result, the gross profit margin increased from 68.5% to 70% and the net profit after tax (NPAT) margin increased from 14.6% to 14.9%. Online sales jumped 41% to $20.3 million, with online sales representing 15.4% of total retail sales.

The ASX dividend share continues to open new stores. It currently has around 120. Further, it has identified the potential for 184 stores around Australia.

Internationally, the company recently launched its American website in a bid to build Beacon Lighting’s market presence in the USA. International sales rose by 65% to $8.1 million. It has also established a new online ceiling fan sales channel in China with Tmall Global.

Garda Diversified Property Fund (ASX: GDF)

This business owns 17 properties. It describes itself as a real estate investor, developer, and manager with investments along the eastern seaboard of Australia, from Cairns to Melbourne. In April 2022, its investments were worth around $603 million, split almost equally between industrial properties and commercial office properties.

It’s currently rated as a buy by the broker Morgans with a price target of $1.83. This implies a possible upside of around 20%.

Last month, the company updated the market with its latest valuation and net tangible assets (NTA) numbers. The business saw a $22.5 million valuation uplift, helping the NTA rise by 14 cents per security to $1.86. That means the current Garda Diversified Property Fund share price is at an 18% discount to the NTA.

Morgans thinks that the ASX dividend share is going to pay a distribution of 7.4 cents per security in FY23. That translates into a forward distribution yield of 4.8%.

Garda boasts that its active management, combined with “strong market fundamentals”, continues to deliver value for investors.

Looking at a few portfolio metrics, its portfolio occupancy rate in the FY22 half-year result was 94%, with 3.2% fixed annual rent increases. The weighted average lease expiry was 5.6 years.

The post 2 buy-rated ASX dividend shares for income in 2022 appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Scott Phillips.

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