Morgans names the best ASX 200 dividend shares to buy

Are you an income investor searching for dividends? If you are, the team at Morgans has your back.

Listed below are two ASX dividend shares that the broker rates among the best to buy right now. Here’s what it is saying about them:

BHP Group Ltd (ASX: BHP)

Morgans has named the Big Australian as one of its best ideas again this month. The broker has an add rating and $47.00 price target on the mining giant’s shares.

It likes the company due to the diversity of its operations and strong balance sheet. It commented:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

In respect to dividends, the broker is forecasting fully franked dividends per share of approximately $2.96 in FY 2023 and $2.99 in FY 2024. Based on the current BHP share price of $42.95, this equates to yields of 6.9% and 7%, respectively.

Westpac Banking Corp (ASX: WBC)

This banking giant has been named on Morgans’ best ideas list this month. The broker has an add rating and $25.80 price target on its shares.

It believes Westpac could deliver a big improvement in its return on equity metric if everything goes to plan. Combined with its attractive dividend yield, Morgans thinks Westpac is a dividend share to buy. It commented:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans is forecasting fully franked dividends per share of 153 cents in FY 2023 and 159 cents in FY 2024. Based on the current Westpac share price of $23.97, this will mean yields of 6.4% and 6.6%, respectively.

The post Morgans names the best ASX 200 dividend shares to buy 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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