2 buy-rated ASX dividend shares for income investors

Income investors may want to check out these dividend shares…

| More on:
ASX dividend shares represented by cash in jeans back pocket

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Are you interested in boosting your income portfolio with some new additions? Then below are two options to consider.

Here's why these ASX dividend shares have been rated as buys:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is Adairs. It is a leading retailer of homewares and home furnishings in Australia and New Zealand through both retail stores and online channels.

It has been in fine form in FY 2021 thanks to heightened sales during the pandemic. And while it will be very hard for Adairs to outperform this in FY 2022, it has been tipped by Goldman Sachs to resume its growth again in FY 2023.

This is due to its strong market position and omni-channel footprint, which the broker notes gives it exposure to both online and in-store growth. In addition to this, Goldman sees upside potential in Adairs' average order value compared with peers in the home category.

The broker currently has a buy rating and $4.80 price target on its shares. It is also forecasting fully franked dividends per share of 26 cents in FY 2021, 25.1 cents in FY 2022, and then 26.8 cents in FY 2023. Based on the current Adairs share price of $4.07, this will mean yields of 6.4%, 6.15%, and 6.6%, respectively.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Another ASX dividend share to look at is ANZ. It could be a top option due to its increasingly positive outlook thanks to improving trading conditions and cost reductions. The latter sees ANZ aiming to reduce its cost base significantly to $8 billion in the near future.

This, combined with its very strong capital position, is expected to underpin generous dividends and share buybacks in the coming years.

In respect to dividends, the team at Morgans is forecasting fully franked dividends of 145 cents per share in FY 2021 and then 165 cents per share in FY 2022. Based on the latest ANZ share price of $29.53, this represents yields of 4.9% and 5.6%, respectively. Its analysts currently have an add rating and $34.50 price target on ANZ's 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 recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Dividend Investing

NAB stock: Should you buy the 4.7% yield?

Do analysts think this banking giant is a buy for income investors?

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Dividend Investing

The smartest ASX dividend shares to buy with $500 right now

Analysts have put buy ratings on these shares for a reason.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

1 ASX dividend stock down 17% to buy right now

Analysts see a lot of value and big dividend yields in this beaten down stock.

Read more »

Excited woman holding out $100 notes, symbolising dividends.
Dividend Investing

3 high-yield ASX 300 dividend stocks to buy for your income portfolio

Analysts expect big dividend yields from these buy-rated shares.

Read more »

A golfer celebrates a good shot at the tee, indicating success.
Dividend Investing

These ASX dividend winners keep giving investors a pay rise

These stocks have built an impressive consecutive dividend growth streak.

Read more »

a man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth that is place directly underneath him.
Dividend Investing

3 ASX value traps I wouldn't buy for dividends right now

I'd stay away from these shares if you don't want a nasty dividend surprise.

Read more »

Smiling woman holding Australian dollar notes in each hand, symbolising dividends.
Dividend Investing

2 ASX passive income shares paying 8% and 13% yields

I think both these high yielding ASX dividend stocks offer long-term passive income potential.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
Dividend Investing

After passive income? Check out these ASX 200 dividend shares

ASX dividend shares can provide a reliable source of passive income

Read more »