2 buy-rated ASX shares with growing dividends

These dividend shares are growing nicely…

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Are you looking to add some dividend shares to your portfolio in the near future? Then take a look at the ones listed below.

Both dividend shares have been tipped to grow their distributions over the coming years by analysts. Here’s what you need to know about them:

Bapcor Ltd (ASX: BAP)

The first ASX dividend share to look at is Bapcor. It is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions.

Thanks to its strong market position, growing store footprint, a favourable redirection in consumer spending, and robust demand for used cars, Bapcor was a very positive performer in FY 2021. This led to elevated sales across all its brands and underpinned strong group sales and profit growth.

The good news is that Citi believes Bapcor is well-placed to continue its growth over the long term. This is due to its store rollout plans, supply chain optimisation initiatives, and private label penetration.

Citi expects this to allow Bapcor to grow its fully franked dividend to 23 cents per share in FY 2022, 25 cents per share in FY 2023, and then 32 cents per share in FY 2024. Based on the current Bapcor share price of $8.29, this will mean yields of 2.8%, 3%, and 3.9%, respectively.

Citi has a buy rating and $8.75 price target on the company’s shares.

South32 Ltd (ASX: S32)

Another ASX dividend share to look at is this mining giant. Unlike Fortescue Metals Group Limited (ASX: FMG), which has exposure to just a single commodity, South32 has operations across a number of commodities.

South32 has exposure to a range of commodities including alumina, aluminium, coal, manganese ore, nickel, silver, and very shortly, copper. The latter follows the recent earnings accretive agreement to acquire 45% of the Sierra Gorda copper mine for US$1.55 billion.

All in all, the team at Goldman Sachs believe that these operations and current commodity prices and forecasts leave South32 well-placed to pay huge dividends over the coming years. In fact, the broker is forecasting growing fully franked dividend yields greater than 11% from FY 2022 through to FY 2026.

Goldman has a conviction buy rating and $4.50 price target on the company’s shares.

Should you invest $1,000 in South32 right now?

Before you consider South32, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and South32 wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 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 owns shares of and has recommended Bapcor. 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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