Buy Telstra and this ASX 200 dividend share: Morgans

If you’re looking for dividend shares to buy, then you may want to look at the two shares listed below that have been rated as buys by Morgans.

Here’s why the broker rates these ASX 200 dividend shares highly right now:

QBE Insurance Group Ltd (ASX: QBE)

The first ASX 200 dividend share that has been named as a buy is insurance giant QBE.

Morgans is positive on the company and believe it is well-placed to benefit from rising premiums and cost-outs. The broker also highlights that QBE’s shares trade on lower than average multiples. It said:

With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~9.1x FY23F PE

As for dividends, Morgans expects QBE to pay a 41.5 cents per share dividend in FY 2022 and then a 76.5 cents per share dividend in FY 2023. Based on the latest QBE share price of $12.93, this equates to yields of 3.2% and 5.9%, respectively.

Morgans has an add rating and $14.93 price target on QBE’s shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 share that has been named as a buy is telco giant Telstra.

Morgans likes the company due to its successful turnaround via the T22 strategy and its recently approved restructure. The broker believes the latter could unlock value through asset sales. It explained:

TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders.

In respect to dividends, the broker is expecting Telstra to continue to pay fully franked 16.5 cents per share dividends in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.01 this equates to yields of 4.1%.

Morgans has as an add rating and $4.60 price target on the company’s shares.

The post Buy Telstra and this ASX 200 dividend share: Morgans appeared first on The Motley Fool Australia.

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More reading

• Why I think these 3 ASX 200 dividend shares are top buys for retirement
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• Can Telstra shares deliver 16% upside AND a healthy dividend this year?
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• Buy Telstra and this ASX 200 dividend share for income in 2023: brokers

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 Group. 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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