2 ASX dividend shares that brokers are tipping as buys right now

It's raining cash for this man, as he throws money into the air with a big smile on his face.

It's raining cash for this man, as he throws money into the air with a big smile on his face.

If you’re an income investor in search of dividend shares to buy to combat rising inflation, then you may want to look at the ones listed below.

Analysts are very positive on these dividend shares and are forecasting attractive yields from them in the coming years. Here’s what you need to know:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is leading baby products retailer, Baby Bunting.

Thanks to its leadership position in a less discretionary category which benefits from around 300,000 births a year, Baby Bunting has been tipped to continue growing at a solid rate over the coming years.

Citi is particularly bullish on Baby Bunting and currently has a buy rating and $6.22 price target on its shares.

The broker commented: “[W]e forecast a FY21 to FY24 EPS CAGR of 17%, and see growth being driven by i) rollout, ii) ramp up of new stores, iii) margin expansion and iv) penetrating existing categories with low presence. Further, the stocks growth prospects are in some respects less risky than other high multiple retailers who are relying more on new markets and acquisitions.”

As for dividends, Citi has pencilled in fully franked dividends per share of 16 cents in FY 2022 and 19 cents in FY 2023. Based on the current Baby Bunting share price of $4.17, this will mean yields of 3.8% and 4.5%, respectively.

Telstra Corporation Ltd (ASX: TLS)

Another top ASX dividend share to consider is Telstra. It is of course Australia’s largest telecommunications company.

Telstra could be a great option in the current environment given its defensive qualities and attractive yield. In addition, Telstra’s outlook is now arguably the most positive it has been in over a decade. This is thanks to the success of its T22 strategy which ends this year and the potential of its upcoming T25 strategy.

Management is very confident in its plans and expects the T25 strategy to deliver solid and sustainable growth in the coming years. This could bode well for Telstra’s dividends.

For now, though, the team at Ord Minnett is expecting fully franked 16 cents per share dividends again in FY 2022 and FY 2023. Based on the current Telstra share price of $3.82, this will mean yields of 4.2%.

In addition, Ord Minnett sees a lot of value in its shares at the current level. Earlier this week it reiterated its buy rating with a $4.65 price target.

The post 2 ASX dividend shares that brokers are tipping as buys right now appeared first on The Motley Fool Australia.

Should you invest $1,000 in Baby Bunting Group Ltd right now?

Before you consider Baby Bunting Group Ltd, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Baby Bunting Group Ltd wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of January 13th 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://www.fool.com.au/2022/06/22/2-asx-dividend-shares-that-brokers-are-tipping-as-buys-right-now-2/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s