One thing the S&P/ASX 200 Index (ASX: XJO) is not short of is dividend shares. Which certainly is a big positive in this low interest rate environment.
Two ASX 200 shares that have been tipped to grow their dividends are listed below. Here’s what you need to know about them:
Sonic Healthcare Limited (ASX: SHL)
The first ASX 200 dividend share to look at is Sonic Healthcare. It is one of the world’s leading healthcare providers, with operations in Australasia, Europe and North America. It currently employs more than 1,500 pathologists and radiologists, and more than 10,000 medical scientists, radiographers, sonographers, technicians, and nurses.
It has also just added to its network with a binding agreement to acquire 100% of Canberra Imaging Group. Management believes the acquisition is a significant and positive step in the development of Sonic’s Imaging division in Australia. It expects it to broaden its footprint, deepen its talent pool, and increase the revenue of the division by ~10%.
In the meantime, Sonic appears well-placed for growth in the near term thanks to the increased demand for COVID testing.
One broker that is positive on Sonic is Credit Suisse. It currently has an overweight rating and $40.00 price target on its shares. The broker is also forecasting dividends of 97 cents per share in FY 2021 and 98 cents per share in FY 2022. Based on the latest Sonic share price of $38.40, this will mean yields of 2.5% and 2.6%, respectively.
Wesfarmers Ltd (ASX: WES)
Another dividend share to look at is Wesfarmers. It is the conglomerate behind several popular retail brands such as Bunnings and Kmart and a diverse group of industrial businesses.
Wesfarmers has been a strong performer in FY 2021 thanks to positive performances across the majority of its businesses. Though, the star of the show continues to be the key Bunnings business. The hardware giant has been benefiting from the housing market boom and home improvement-related stimulus, underpinning impressive sales and profit growth this year. And given how Bunnings is far and away the biggest contributor to its earnings, this is a very big positive for shareholders.
Macquarie appears confident that its growth can continue and is forecasting fully franked dividends of $1.74 per share in FY 2021 and $1.76 per share in FY 2022. Based on the latest Wesfarmers share price, this implies yields of 2.9% and 3%, respectively, over the next two years.