Buy Pilbara Minerals and this ASX dividend share: experts

If you’re searching for dividend shares to buy when the market reopens, then it could be worth checking out the two listed below.

Here’s why they have been tipped as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that has been tipped as a buy is footwear and apparel retailer Accent. It is the owner of a growing portfolio of retail brands such as Hype DC, The Athlete’s Foot, Glue, Platypus, Sneaker Lab, and Stylerunner.

Its shares have been on fire in recent weeks thanks to a particularly positive trading update. Goldman Sachs was impressed, commenting:

AX1 has provided a trading update which was a +12% beat on revenue and +35% beat on EBIT for 1H23 vs. GSe. The revenue beat was consistent across key banners, and commentary on trading through January suggests strong trading is ongoing. January and back to school is a key period for AX1, so this gives us confidence in FY23.

In response to the update, the broker has reiterated its buy rating with an improved price target of $2.75.

As for dividends, the broker is forecasting a fully franked dividend of 12.2 cents per share in FY 2023. Based on the current Accent share price of $2.28, this will mean a yield of 5.4%.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX share to consider is Pilbara Minerals. Although the lithium miner has yet to pay a dividend, one is expected to be declared later this month.

This follows the announcement of the company’s capital management framework late last year. This was put into place in response to the miner generating mountains of cash from its lithium. It commented:

A target dividend payout ratio of 20-30% of free cash flow has been adopted by the Company. This target payout ratio is designed to provide a sustainable dividend return to shareholders, but also reflects the early stages of Pilbara Minerals’ growth cycle, with the remaining cash flow able to be allocated to organic and inorganic growth opportunities.

According to a recent note out of Macquarie, its analysts are expecting the miner to be in a position to reward shareholders with a 30 cents per share dividend in FY 2023. So, with the Pilbara Minerals share price currently fetching $4.89, this equates to a 6.1% dividend yield.

Macquarie also sees plenty of upside for the company’s shares with its outperform rating and $7.50 price target.

The post Buy Pilbara Minerals and this ASX dividend share: experts appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 lithium stocks that leapt beyond 20% in January
• Can buying Pilbara Minerals shares today create long-term wealth?
• Dividend forecasts: 3 ASX 200 shares with 6%+ yields
• 3 ASX All Ordinaries stocks hitting new 52-week highs today
• Should I buy ASX 200 lithium shares now or not?

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 recommended Accent 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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