Goldman Sachs says these ASX dividend shares are buys

If you’re an income investor searching for new dividend shares to buy, it could be worth checking out the two listed below.

Here’s why Goldman Sachs rates them as buys right now:

Westpac Banking Corp (ASX: WBC)

The first ASX dividend share that Goldman Sachs rates highly is banking giant Westpac.

Goldman currently has a buy rating and $26.55 price target on its shares.

Its analysts believe that Westpac provides investors with strong leverage to rising rates. In addition, while the broker believes that Westpac’s $8 billion FY 2024 cost target is unachievable, it still forecasts a healthy 7% reduction in underlying expenses. All in all, it is expecting this to drive solid earnings and dividend growth through to FY 2024.

In respect to the latter, Goldman is forecasting fully franked dividends per share of $1.23 in FY 2022 and $1.35 in FY 2023. Based on the current Westpac share price of $21.40, this will mean yields of 5.75% and 6.3%, respectively, over the next two years.

Woolworths Group Ltd (ASX: WOW)

Another ASX dividend share that Goldman Sachs is a fan of is retail giant Woolworths.

Its analysts were pleased with Woolworths’ performance in FY 2022. The broker highlights that the company’s “results were of high quality with AU supermarket comp store growth of 5.2% in 4Q22 driven by strong price and positive mix.” The good news is that Goldman expects this trend to extend into the first half of FY 2023.

In light of this and its positive long term outlook thanks to its digital and omni-channel advantage, Goldman has a conviction buy rating and $44.10 price target on the company’s shares.

As for dividends, the broker is forecasting fully franked dividends per share of $1.07 in FY 2023 and $1.16 in FY 2024. Based on the current Woolworths share price of $36.70, this will mean yields of 2.9% and 3.2%, respectively.

The post Goldman Sachs says these ASX dividend shares are buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in 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 Scott Phillips.

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