2 highly rated ASX dividend shares for income investors

Wesfarmers Ltd (ASX:WES) and this ASX dividend share could be great options for income investors. Here’s why they are rated as buys…

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man handing over wad of cash representing ASX retail capital return

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If you’re looking for a way to overcome low interest rates, then dividend shares could be the answer.

But which ones should you buy? Below are two ASX dividend shares that have been rated as buys. Here’s why they could be worth considering:

Carsales.Com Ltd (ASX: CAR)

The first ASX dividend share to look at is this auto listings company. It is the dominant force in the ANZ market and has a number of growing operations across the world. It also recently announced the acquisition of US-based Trader Interactive. It is a leading digital marketing solutions and services provider to the commercial truck, recreational vehicle, powersports, and equipment industries.

Carsales has been a positive performer in FY 2021. It expects to report full year adjusted revenue of $433 million to $437 million and adjusted net profit after tax of $149 million to $153 million. The latter will be an increase of 8% to 11% on FY 2020’s profit of $138 million.

Morgans is positive on the company. It currently has an add rating and $20.82 price target on its shares. The broker is also forecasting dividends of 56 cents per share in FY 2021 and 59 cents per share in FY 2022.

Based on the current Carsales share price of $17.27, this will mean fully franked yields of 3.2% and 3.4%, respectively.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share to look at is Wesfarmers. It is one of Australia’s leading conglomerates and the owner and operator of a diverse group of businesses across several sectors. Among its portfolio are the likes of Bunnings, Catch, Covalent Lithium, Kmart, Officeworks, and Target.

It has also been a positive performer in FY 2021. During the first half, it delivered a 16.6% increase in sales to $17.8 billion and a 25.5% jump in net profit to $1.4 billion. This allowed the Wesfarmers board to increase its interim fully franked dividend by 17.3% to 88 cents per share.

Looking ahead, Goldman Sachs is expecting further dividend growth in the second half and FY 2022. The broker is forecasting dividends of $1.88 per share in FY 2021 and $1.98 per share next year. Based on the current Wesfarmers share price of $53.56, this will mean fully franked yields of 3.5% and 3.7%, respectively.

Goldman has a buy rating and $59.70 price target on the company’s shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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