Approaching retirement can be a scary time. There’s a lack of active income to worry about for one thing. But there’s also the pressure of choosing the shares that will provide the passive income to fund said retirement. So who better to turn to for advice for this transition than the legendary investor Warren Buffett?

Not that Warren Buffett knows too much about retirement. Although the man is now 92 years old, he is still very much not retired and remains chair and CEO of the company he has run for more than six decades, Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B).

Some Buffett wisdom for a pending retirement

And Buffett knows a thing or two about obtaining a growing passive income. He bought shares in Coca-Cola Co (NYSE: KO) back in 1988. Coca-Cola is a well-known dividend share over in the United States.

But, as our Fool colleagues over in the US point out, such was Buffett’s prowess in finding the right price, he now enjoys a yield on cost of 54% every year.

So this tells us that Buffett only invests in shares that he feels comfortable holding for a generation or longer. Why Coca-Cola? Buffett’s love of what he calls an economic moat is probably why. And Coke arguably has more than one. There’d be few people on the planet who wouldn’t know what a Coke is for one. But, as usual, Buffett puts it best:

If you gave me $100 billion and said take away the soft drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done.

But Buffett also tells us that it’s ok not to go chasing individual shares for an investment portfolio, even a retirement one.

He once said this on index investing:

If you invest in a very low cost index find – where you don’t put the money in at once, but average in over 10 years – you’ll do better than 90% of the people who started investing at the same time.

So that’s the two takeaways we can take from Buffett for a healthy retirement. Buy the best companies at the right price. And if you don’t know how, stick with a low-cost index fund.

The post Almost ready to retire? I’d follow Warren Buffett’s tips to enjoy a growing passive income from ASX dividend shares appeared first on The Motley Fool Australia.

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• Is the iShares S&P 500 ETF (IVV) really down 95% today?
• One Warren Buffett-style stock I’m ‘never’ selling
• I’d aim for a million by buying just a few ASX shares
• Will the Nasdaq or S&P 500 have a better 2023?
• What Warren Buffett can teach us about handling bear markets

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long January 2024 $47.50 calls on Coca-Cola, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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Shares in the spray-on skin company Avita Medical Inc (ASX: AVH) closed 2.6% higher on Friday at $1.96.

The ASX healthcare share may be down 42% over the year to date, but it appears to be making a comeback.

The Avita share price is up almost 20% over the past six months.

CEO confident about new skin treatment

According to reporting in the Australian Financial Review (AFR), new CEO James Corbett says there is a “pot of gold at the end of the rainbow” with Avita’s expansion into vitiligo.

In market terms, treatment for the autoimmune disease that causes a loss of skin pigmentation has an estimated value of $US5.2 billion (A$7.8 billion).

It would be a welcome turnaround. To say Avita shareholders have been suffering of late is an understatement. Just ask those investors who bought in when the ASX healthcare share was trading above $16 in early 2020.

Corbett said:

I think the sell-off was a combination of us not executing adequately and us not communicating adequately.

Those sound like my problems. It’s not a market problem. I always tell the management team, the stock market will take care of itself, but execution is up to us.

I think shareholders will benefit from more transparency from Avita management, and they’ll get it.

What’s the latest news from Avita?

The company’s flagship product is Recell, which uses a patient’s own cells to treat skin defects. The company intends to expand Recell into a treatment for vitiligo.

According to the AFR, Avita is working with the United States Food and Drug Administration to gain approval for the use of Recell in various soft tissue repair treatments.

It plans to submit applications for Recell’s use in the US$1 billion soft tissue repair market this month. It expects approval in June 2023 and hopes to launch the treatment in July.

Recell as a treatment for vitiligo will take a while longer.

Corbett said:

Vitiligo on the other hand will get approval, but its anticipated primary treatment will occur in the physician office setting, so what we’ll be doing between the expected approval in June 2023, and January 2025… is collect in-office reimbursement approval data, work with government payers, conduct physician initiated studies and work to identify the best patients [those who will benefit most from treatment].

Broker tips $3 target for ASX healthcare share

Bell Potter has a 12-month share price target of $3 on this ASX healthcare share.  

Bell Direct market analyst Grady Wulff last week told my colleague, Tony, he rates Avita a speculative buy.

He tips the ASX healthcare share “really takes off” when those approvals come through in mid-2023.

Wulff said:

They are well capitalised while expecting to release major clinical trial results in the near future.

The company is making waves and they’ve got really strong revenues up 29% year on year to US$9.1 million for the commercial product sales, but they are burning a lot of cash.

The revenues were 7% above what Bell Potter expected for the September quarter.

The post Is there an $8 billion ‘pot of gold at the end of the rainbow’ for investors in this ASX healthcare share? appeared first on The Motley Fool Australia.

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• 2 absolute bargain ASX shares to buy right now: analyst

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical. The Motley Fool Australia has recommended Avita Medical. 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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Are you looking to add some growth shares to your portfolio in 2023?

If you are, two explosive ASX growth shares that could be worth considering are listed below. Here’s what you need to know about them:

Aristocrat Leisure Limited (ASX: ALL)

Morgans believes that this gaming technology company is a growth share to buy right now. Its analysts have an add rating and $43.00 price target on its shares. This compares to the current Aristocrat share price of $34.01.

The broker is a fan of the company due to its strong long term growth potential. This is being driven by a number of factors including its ability to invest in design and development and its expansion in real money gaming (RMG). Morgans commented:

We have three key reasons for being positive on ALL. They are: (1) long-term organic growth potential. ALL is better capitalised than many of its competitors and has what we regard as a strong platform to continue investment in design and development in both its land-based gaming and digital businesses; (2) strong cash conversion and ROCE. ALL is a capital-light business despite its ongoing investment in Gaming Operations capex and working capital. It has a high level of cash conversion and ROCE and (3) strong platform for investment. ALL has funding capacity for organic and inorganic investment in online RMG, even after the recent buyback. Its current available liquidity is $3.8bn.

Temple & Webster Group Ltd (ASX: TPW)

Goldman Sachs is a big fan of this online furniture and homewares retailer and has a buy rating and $7.55 price target on its shares. This compares favourably to the latest Temple & Webster share price of $4.55.

Goldman believes that Temple & Webster is well-placed for long term growth thanks to its leadership position in a retail category that is in the early stages of shifting online. It commented:

Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.

The post These are the explosive ASX growth shares to buy for 2023 according to experts appeared first on The Motley Fool Australia.

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• ‘Strong buy’: Experts name 2 ASX shares enjoying a post-COVID resurgence
• I’d aim for $1 million, buying just 10 cheap ASX shares
• Down but not out: Expert names 2 slaughtered ASX shares to buy right now
• With $5,000 to invest, I’d aim to make a 1,000% return from ASX shares
• 10 ASX shares to buy in 2023

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 positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster 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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If you’d like to make some investments in 2023 but aren’t sure which shares to buy, you could look at exchange traded funds (ETFs).

But which ETFs could be buys? Two that are very popular and could be top options for next year are listed below. Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF for investors to consider for 2023 is the BetaShares Global Cybersecurity ETF.

As you might have guessed from its name, this fund provides investors with exposure to the leaders in the global cybersecurity sector.

This year there have been a number of major cyberattacks and you can bet that they won’t be the last. This has highlighted just how important cybersecurity is as the world shifts to the cloud.

This bodes well for the companies included in the fund, which stand to benefit from increasing demand from consumers and businesses. This includes Accenture, Cloudflare, Crowdstrike, Okta, and Palo Alto Networks.

Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU)

Another ETF that could be a top option for investors in 2023 is the Vanguard All-World ex-U.S. Shares Index ETF.

Vanguard notes that the VEU ETF brings the world to your portfolio with around 3,500 companies listed in developed and emerging markets across the globe, excluding the United States.

In addition, it highlights that it can expand a portfolio to include many sectors not well represented in Australia. The largest country allocations are Japan, China, United Kingdom, France, and Canada, with Australia accounting for approximately 5% of the exposure.

Among its holdings you’ll find shares sectors such as financial (e.g. Royal Bank of Canada, AIA Group, HSBC Holdings), consumer discretionary (e.g. Samsung, LVMH Moet Hennessy Louis Vuitton, Sony), technology (e.g. Taiwan Semiconductor, Tencent), industrials (e.g. Toyota) and healthcare (e.g. Astra Zeneca, Roche Holdings).

The post Here are 2 fantastic ETFs for ASX investors in 2023 appeared first on The Motley Fool Australia.

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• I’d aim for $1 million, buying just 10 cheap ASX shares
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• 3 top ETFs for ASX investors to buy and hold for a decade

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 positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. 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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The Fortescue Metals Group Limited (ASX: FMG) share price was on form last week and continued its ascent.

So much so, the iron ore miner’s shares are now up almost 50% since hitting a 52-week low at the end of October.

Investors have been bidding the Fortescue share price higher in response to a strong rebound by the iron ore price amid the easing of COVID restrictions in China.

Where next for the Fortescue share price?

One leading broker appears to believe that investors should be locking in their gains and heading to the exits before it’s too late.

According to a note out of Morgans, its analysts have reiterated their reduce rating with a trimmed price target of $14.50.

Based on the current Fortescue share price of $21.39, this implies potential downside of 32% for investors over the next 12 months.

What did the broker say?

Morgans believes that investors have got ahead of themselves when it comes to iron ore miners. It commented:

Over the last month iron ore price (+27%) and share prices for BHP (+16%), RIO (+20%) and FMG (+27%) have bounced hard off their November lows. We agree that the developments are likely to see improved demand conditions in early 2023, but the issue is how fast the equity market has moved to price in this recovery.

This is reflected in the current FCF yields on offer in our iron ore miners, which even at spot prices are a modest 6%/6%/9% for BHP/RIO/FMG respectively, which is well below their average levels over recent years.

Overall, the broker believes that investors should sit tight and wait for a better entry point. It concludes:

We can certainly see the potential green shoots for a recovery in demand drivers for steel, but it is also not hard to see a fresh bout of volatility before that recovery takes hold. We view current share prices on our large-cap iron ore miners as suggesting we have to ‘pay up front’ for that potential recovery, leaving us with lower conviction. As a result we downgrade our rating on BHP and RIO to HOLD (from ADD), while maintaining a REDUCE on FMG.

The post Look out below! Broker tips Fortescue share price to fall 32% appeared first on The Motley Fool Australia.

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• Will Fortescue’s green hydrogen plans really pay off for shareholders?
• Forecast for ASX 200 iron ore shares in 2023: bull vs bear
• Is this the beginning of a beautiful green hydrogen friendship between Fortescue and Rio Tinto?
• Dividend darling becomes disappointment: What happened to Fortescue shares?

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 no position in any of the stocks mentioned. 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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Flaming hot inflation and raging interest rate rises are taking their toll on how far the average Aussie earnings can stretch. It’s times like these that passive income from dividend-paying S&P/ASX 200 Index (ASX: XJO) stocks become all the more valuable.

An extra $1,800 each year can go a long way to easing some of the financial strain. Yet, despite a 4% return on cash savings now being a reality, you’d need to stash $45,000 to earn $1,800 annually.

That’s why I’d personally be much more inclined to invest in Australia and New Zealand Banking Group Ltd (ASX: ANZ) instead. The big four bank has filled its shareholders’ pockets with a generous $1.46 worth of fully franked dividends this year.

Notably, the exceptional 6.2% yield is not the product of an abnormally high payout this year. In the last 10 years, ANZ has typically paid between $1.40 to $1.80 in dividends per share.

Out of all the ASX bank stocks, why ANZ?

You might be thinking: ANZ is the only big four bank in the red compared to a year ago, why would you want to invest in it for passive income? To that I say, great question, thanks for asking! So here’s my reasoning…

While it is true ANZ is the worst-performing ASX big four bank stock in the last 12 months, based on its share price — fundamentally it is the best, at least in my eyes.

Compared to a year ago, the smallest member of the major four has dialled up its earnings the most. Net profits increased 15.5% year-on-year, while its peers were hard-pressed to break a 10% clip.

In addition, the potential acquisition of Suncorp could bolster ANZ’s loan book with a further $47 billion in home loans and $11 billion in commercial loans.

Even with the potential upside, ANZ appears to be trading at a discount to its peers. Right now, the price-to-earnings (P/E) ratio on ANZ is hovering around 10 times. Meanwhile, the bigger end of town is fetching between 13 to 18 times earnings.

Paving the way to $1,800 passively

The most important component in this assessment is ANZ’s passive income potential. In the big four landscape, the blue bank offers the biggest dividend yield at 6.2%.

Now, to generate $1,800 per year in income from this dividend investment, one would only need to buy six shares a week over four years — based on the current share price. The table below outlines the journey of a willing investor.

Year	Number of shares	Annual income
1	312	$455
2	624	$911
3	936	$1,367
4	1,248	$1,822

If all went to plan — and ANZ continues to offer a similar dividend — in four years’ time, $1,822 would be flowing in passively.

Earlier in the article, I highlighted how $45,000 would be required to generate the same income. Whereas, the ANZ route would require a more manageable $29,465 investment over four years.

It might still seem like a lot now, but at $142 per week, it quickly adds up. And don’t forget — unlike cash, your initial investment in an ASX stock can appreciate in value over time.

The post I’d buy 6 shares a week of this ASX stock for $1800 a year in passive income appeared first on The Motley Fool Australia.

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• Here’s how I’d invest $20,000 in ASX 200 shares for a 7% dividend yield
• Can ANZ shares finish the year with a strong performance in December?
• Why did the ANZ share price tumble in November while the ASX 200 gained 6%?
• The 3 best-performing ASX 200 bank shares in November revealed
• The 10 ASX 200 shares responsible for 60% of all Aussie dividends last quarter

Motley Fool contributor Mitchell Lawler 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 no position in any of the stocks mentioned. 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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If you’re getting ready to retire, picking the right ASX dividend shares can be a tough decision. Planning for a time when there is no weekly (or fortnightly) paycheque coming through the door does amp up the pressure a little.

The ASX has hundreds of dividend shares to choose from. But here is one that I think could have the potential to fulfil all the needs of a retiree in one fell swoop.

Plato Income Maximiser Ltd (ASX: PL8) is a listed investment company (LIC) that is built for retirees, or as the provider puts it, “designed specifically with SMSF and pension-phase investors in mind”.

This LIC holds a portfolio of ASX divided shares, chosen for their dividend and franking credit potential. Some of its current holdings include BHP Group Ltd (ASX: BHP), South32 Ltd (ASX: S32), Woodside Energy Group Ltd (ASX: WDS) and Westpac Banking Corp (ASX: WBC)

A retiree share that pays monthly dividends

Plato Income Maximiser pays out a dividend every month to its investors. These typically come fully franked too. At the last share price, the yields are the same.

So that’s a lot of dividend income investors can enjoy in retirement. But let’s talk about performance. There are many income-focused investments on the ASX. But more than a few tend to prioritise income above capital preservation, which can be detrimental to investors’ overall financial returns in the long run.

So as of 31 October (the latest figures available), the Palto Income Maximiser had delivered a total return of 4.5% over the preceding 12 months. That includes this LIC’s management fee of 0.8% per annum. That looks pretty good against the ASX 200 benchmark’s loss of 0.5% over the same period.

Over the past three years on average, this LIC has averaged a return of 7.5% per annum, 7.1% of which came in the form of dividend income. Again, that beats the benchmark’s return of 6.2% per annum over the period.

The Plato Income Maximiser has also returned an average of 8.9% per annum (7.6% of which came from dividends) since its inception in April 2017. Once again, that beats out the benchmark, which returned an average of 8.4% per annum.

So this might make the Plato Income Maximiser LIC a perfect option to consider for an investor approaching retirement today. Monthly dividends that come fully franked, a performance that has consistently beaten the market… what more could a retiree ask for?

The post Getting ready to retire? This might be the only ASX dividend share you’ll ever need appeared first on The Motley Fool Australia.

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More reading

• I’d buy 6 shares a week of this ASX stock for $1800 a year in passive income
• ‘Strong buy’: Experts name 2 ASX shares enjoying a post-COVID resurgence
• Here’s how I’d invest $20,000 in ASX 200 shares for a 7% dividend yield
• Earn passive income with these strong ASX 200 dividend shares: brokers
• Down 14% this week, are Liontown shares now ‘relatively less expensive’?

Motley Fool contributor Sebastian Bowen 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 Westpac Banking. 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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Thanks to vaccines and better treatments for COVID-19, much of the developed world seems to have moved on from the pandemic.

Even China, which had suffered from brutal zero-virus policies for three years, is starting to relax its stance despite potentially devastating health consequences.

This means that many businesses are now adjusting to a new post-pandemic environment.

This week Wilson Asset Management analysts named two ASX shares to buy for companies that could benefit from this new era:

The business now exceeding pre-pandemic numbers 

According to Wilson senior equity analyst Shaun Weick, iCollege Ltd (ASX: ICT) is set to cash in from a resurgence in student numbers.

“Students definitely want to come back,” he said in a WAM video.

“The recent quarterly update highlighted that enrolments are at records and they’re exceeding pre-COVID levels.”

The stock price for the vocational education provider has roughly doubled from 12 months ago, which is a remarkable effort considering the rest of the market’s underperformance.

Weick reckons the future is bright for this ASX share.

“What the market’s missing on this stock is around the incremental operating leverage as capacity within their colleges are filled, which we think will drive earnings upgrades,” he said.

“The balance sheet’s in good shape. We think they’ll undertake acquisitions from here, so that’s a strong buy from us.”

This business actually improved in the last housing downturn

Online furniture merchant Temple & Webster Group Ltd (ASX: TPW) is a buy for Wilson senior equity analyst Sam Koch.

The business and the stock boomed during the first wave of COVID-19 lockdowns, with consumers eager to improve their home environment.

That sugar hit is now in the past, and with the share price less than half of what it was a year ago, Koch feels like it’s time for a new life.

That’s despite the economy now slowing down from massive interest rate hikes.

“Yes, a weaker consumer and a weaker housing market are worth monitoring,” he said.

“However, we see their relative value offering, their drop ship model, and their prudent cost management will be able to see them outperform and take [market] share during this downturn.”

Koch’s theory has some historical precedence.

“You only have to go back to 2018 when the last housing market downturn happened and they actually saw an improvement in gross profit margins as a result of the product mix shift.”

The Wilson team’s bull case for Temple & Webster is “simple”, he added.

“We just see that they’ve been able to comp the high sales period during COVID lockdowns last year, and now we should be able to see sales growth returning to the business and a re-rating occurring over the period.”

The post ‘Strong buy’: Experts name 2 ASX shares enjoying a post-COVID resurgence appeared first on The Motley Fool Australia.

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• I’d aim for $1 million, buying just 10 cheap ASX shares
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• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today
• Why CogState, Downer, Temple & Webster, and Woodside shares are dropping

Motley Fool contributor Tony Yoo has positions in Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster 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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How does $1,400 of passive income each year sound? Think of the weekend getaways, wining and dining, and extra time with family that could provide. It would even protect hard-earned cash from Australia’s current 6.9% inflation rate.

And all it would take is $20,000 invested in S&P/ASX 200 Index (ASX: XJO) shares with a 7% dividend yield.

Though, achieving such a yield might be easier said than done.

Here’s how I would invest $20,000 in ASX 200 shares if I were aiming to receive a 7% dividend yield.

How I’d find ASX 200 shares to provide a 7% dividend yield

Of course, the first step to building a portfolio capable of providing a 7% yield is stock picking.

I would likely seek out five to 10 shares to invest between $2,000 and $4,000 into, thereby diversifying my portfolio and reducing potential risks.

That’s particularly important, as past performance doesn’t guarantee future performance. A dividend giant today may well be relatively average in 12 months’ time – just ask Fortescue Metals Group Limited (ASX: FMG).

Perhaps surprisingly, I wouldn’t even consider a company’s yield when seeking stocks to buy.

My ultimate goal is to achieve a 7% yield, not just today but also over the years to come.

Thus, I would focus on finding quality companies I like as long-term investments. Personally, I believe a quality business is one offering both a strong balance sheet and competitive advantages over its peers.

Having found a few such businesses, I would consider if they’re trading at a good price. If they are, then I would look at their dividend yield.

A game of averages

Fortunately, to achieve a 7% yield across five to 10 ASX 200 shares, I could buy various stocks with various yields.

Rio Tinto Limited (ASX: RIO), for instance, offers an 8% dividend at the time of writing. Meanwhile, Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are trading with a 6% yield.

Together, they could see an investor realising a 7% yield that may be better protected against a downturn in either the banking or materials sector.

Finally, I wouldn’t necessarily ‘set and forget’ my new dividend-paying portfolio.

While passive income is, indeed, passive, it might need tweaking from time to time to continue providing my targeted income stream.

Keeping an eye on my investments and rebalancing my portfolio as needed will likely allow me to continue reaping my targeted 7% yield.

The post Here’s how I’d invest $20,000 in ASX 200 shares for a 7% dividend yield appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 no position in any of the stocks mentioned. 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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The good news for income investors is that there are a number of quality ASX dividend shares to choose from on the ASX 200 index.

Two that have been tipped as strong buys are listed below. Here’s what analysts are saying about them:

Elders Ltd (ASX: ELD)

The first ASX 200 dividend share that could be a strong buy is Elders.

Goldman Sachs currently has a conviction buy rating and $18.40 price target on the agribusiness company’s shares.

Its analysts believe that recent share price weakness has been unwarranted and has created a buying opportunity for investors. It commented:

We view the share price reaction […] as unwarranted. The fundamentals of this company remain unchanged, and strong in our view. The Australia agricultural environment is structurally strong and ELD is uniquely placed to benefit as a highly diversified Agribusiness with broad geographic and segment exposure. Farmer balance sheets and industry data are showing strong intentions for investment and expanded production in the context of a tightening global agricultural market.

In respect to dividends, the broker is expecting fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $9.99, this will mean yields of 5.3% and 5.7%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that has been named as a strong buy is banking giant Westpac.

The banking giant has been included on Morgans’ best ideas list with an add rating and $25.80 price target. This compares to the latest Westpac share price of $23.44.

Morgans likes Australia’s oldest bank due to its business transformation initiatives. 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.

As for dividends, the broker 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, this will mean yields of 6.5% and 6.8%, respectively.

The post Earn passive income with these strong ASX 200 dividend shares: brokers appeared first on The Motley Fool Australia.

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More reading

• After sliding into the red last month, what’s the outlook for the Westpac share price in December?
• 3 passive income ASX 200 dividend shares that can help make you richer
• Morgans names 2 more of the best ASX shares to buy in December
• 5 things to watch on the ASX 200 on Tuesday
• Will the RBA raise rates again next week? Here’s what Westpac expects

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Elders and Westpac Banking. 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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