Broker names 2 high yield ASX dividend shares to buy

These high yield dividend shares could be top options…

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Fortunately for income investors, there are a large number of dividend shares to choose from on the Australian share market.

To help narrow down your options, I have picked out a couple that a leading broker is very positive on. They are as follows:

Adairs Ltd (ASX: ADH)

Adairs is a leading retailer of homewares and home furnishings in Australia and New Zealand through both retail stores and online channels. This includes via the eponymous Adairs brand and also the online-only Mocka brand.

The team at Morgans are positive on the company. They currently have an add rating and $4.20 price target on the company’s shares. The broker is also forecasting some generous fully franked dividends in the near term. Morgans expects dividends per share of 22 cents in FY 2022 and then 27 cents in FY 2023.

Based on the current Adairs share price, this will mean yields of 5.4% and 6.6%, respectively.

Morgans commented: “ADH has a strong BS [balance sheet], loyal customer base and various growth options. There is of course a question mark over whether elevated GMs are sustainable long term, like most retailers. However, at this valuation, we see enough safety in the numbers.”

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

This banking giant could be another dividend share for income investors to consider right now.

A note out of Morgans reveals that ANZ is the broker’s favourite big four bank, partly for valuation reasons. It has an add rating and $34.50 price target on the company’s shares.

Morgans has also forecast fully franked dividends per share of $1.45 in FY 2021 and then $1.65 in FY 2022. Which, based on the current ANZ share price, will mean yields of 5.3% and 6%, respectively.

The broker explained: “We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has improved. While ANZ’s Australian home loan book has been growing below system over recent months, we expect a disciplined margin performance from ANZ.”

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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. owns shares of and 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.

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