Why NAB (ASX:NAB) and this ASX dividend share could be buys

These dividend shares could be buys…

| More on:

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

If you're currently building an income portfolio, then you might want to look at the shares listed below.

Here's why these ASX dividend shares could be worth considering right now:

a happy child dressed in full business suit gives the thumbs up sign while sitting at a desk featuring a piggy bank and a sack of money with a dollar sign on it.

Image source: Getty Images

National Australia Bank Ltd (ASX: NAB)

The first ASX dividend share to look at is this banking giant. It could be a top option due to its improving performance, positive outlook, strong balance sheet, and proposed acquisition of Citi's Australian consumer business.

In respect to its improving performance, last month NAB released its third quarter update and revealed unaudited cash earnings of $1.70 billion. This was broadly in line with the quarterly average it achieved during the first half and well ahead of expectations.

Goldman Sachs has been pleased with NAB's performance and plans. So much so, it has a conviction buy rating and $30.62 price target on its shares.

In addition, Goldman is forecasting a fully franked $1.40 per share dividend in FY 2022. Based on the current NAB share price of $27.35, this will mean a yield of 5.1%.

Scentre Group (ASX: SCG)

Another ASX dividend share that Goldman Sachs rates highly is Scentre. It likes the shopping centre operator due to its strong market position and positive leverage to inflation.

Goldman estimates that 70%+ of Scentre's base rental income is subject to inflation-linked escalation, which bodes well in the current environment. The broker also highlights that higher inflation aids the profitability of its retailer tenancy base, which benefits from fixed cost leverage.

In light of this, the broker currently has a buy rating and $3.32 price target on the company's shares. This compares to the latest Scentre share price of $2.90.

Furthermore, based on its current share price, Goldman is forecasting dividend yields of approximately 5% in FY 2021 and 5.7% in FY 2022.

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 Bruce Jackson.

More on Dividend Investing

ETF written in white on a multi coloured background.
Dividend Investing

Why I'd buy these 2 ASX ETFs for $10,000 a year in passive income

These two ASX ETFs provide a diversified means to earning a $10,000 yearly passive income.

Read more »

Woman holding $50 and $20 notes.
Dividend Investing

8 ASX shares going ex-dividend next week

Commonwealth Bank, Resmed, and AMP are among the ASX shares with ex-dividend dates next week.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

Why I'd buy Telstra and these ASX dividend shares for passive income

These shares offer the type of qualities I would want from passive income investments.

Read more »

Close-up of a business man's hand stacking gold coins into piles on a desktop.
Dividend Investing

2 ASX dividend shares I'd buy today for passive income

These ASX dividend shares can deliver a strong passive income investors.

Read more »

Australian notes and coins symbolising dividends.
Communication Shares

Everything you need to know about the Telstra dividend

Owners of Telstra shares can look forward to another good dividend.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Bank Shares

Revealed: The ASX bank share with the highest dividend yield today

The highest-yielding bank right now might surprise you.

Read more »

An older gentleman leans over his partner's shoulder as she looks at a tablet device while seated at a table.
Dividend Investing

134,814 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension

I’d say this ASX stock is more appealing than the Age Pension.

Read more »

A man in a sweatshirt holds two different phones to compare telco services.
Dividend Investing

How many Telstra shares do I need to buy to generate $10,000 in passive income?

Telstra pays two fully-franked dividends per year.

Read more »