Are these 2 ASX dividend shares buys in December 2021?

There are some ASX dividend candidates for income in December 2021.

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A smiling woman with a handful of $100 notes, indicating strong dividend payment by Thorn Group

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December 2021 could be a good time of year to find ASX dividend shares to boost investment income.

Businesses that are expected to pay high dividend yields may be attractive for people wanting to beat what they get from the bank.

With that in mind, these two could fit the bill:

Adairs Ltd (ASX: ADH)

Adairs is currently rated as a buy by the broker Morgans, with a price target of $4.80 – that’s 35% higher than where it is right now. The broker likes the opportunities presented by the Focus acquisition and believes that Adairs looks good value based on its earnings potential and expected dividend income.

Morgans puts the current Adairs share price at just 8x FY23’s estimated earnings with a potential grossed-up dividend yield of 11.8%.

Looking at the ASX dividend share’s completed acquisition of Focus on Furniture, it’s expected to deliver pro forma double digit accretion to earnings per share (EPS) in FY23, being the first year of ownership. The enterprise value price is $80 million, which compares to FY21 earnings before interest and tax (EBIT) of $32.8 million.

Adairs said that there are growth opportunities from a national store roll out, online growth and category/range expansion. Management said that there is complementary customer product overlap with opportunities to leverage strengths in store expansion, product development and last mile delivery capability.

It has a plan to continue to grow the number of larger stores, which are materially more profitable than smaller format stores.

Pacific Current Group Ltd (ASX: PAC)

This ASX dividend share is currently rated as a buy by the broker Ord Minnett, with a price target of $10.30 – that’s around 50% higher than where it is today.

One of the main reasons why the broker likes this business is the recent listing of GQG Partners Inc. (ASX: GQG). The broker thinks Pacific seems good value.

Looking at the estimates for FY23, Pacific Current is valued at 11x FY23’s estimated earnings with a grossed-up dividend yield of 8.7% for that year.

This business invests in fund managers around the world and helps them grow with expertise and capital

The company’s management fee profitability continues to rise, with growing funds under management (FUM) and a reduction in expenses.

The ASX dividend share continues to look for investment opportunities. It’s expecting continued improvement in corporate and boutique prospects.

It’s expecting continued progress in FY22 and FY23, as well as “strong cash flow” which supports the company’s full year dividend payout in the 60% to 80% range. It’s expecting higher revenue and profit in FY22, as well as broad organic FUM growth across the portfolio.

The business recently outlined that altogether its net asset value at 30 June 2021 was $7.92, and at 17 November 2021 it was $10.46 which included the book value of GQG at the time.

It’s also expecting to access a new credit line and/or dedicated external pools of capital in FY22. The ASX dividend share is also planning to deploy the proceeds of the 1% of GQG it sold with the fund manager’s listing.

Should you invest $1,000 in Pacific Current right now?

Before you consider Pacific Current, you'll want to hear this.

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Motley Fool contributor Tristan Harrison 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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