Why analysts are bullish on these 2 ASX dividend shares

Here are two buy-rated dividend shares…

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There are a lot of dividend options for investors to choose from on the Australian share market. To narrow things down, listed below are two dividend shares that are highly rated right now.

Here’s what analysts are saying about these ASX dividend shares:

Adairs Ltd (ASX: ADH)

This furniture and homewares retailer’s shares have come under significant pressure this year due to its disappointing performance during the first half caused by COVID lockdowns.

However, the team at Morgans has told investors that now is not time to throw in the towel. While disappointed with its first half performance, it believes the selling of the Adairs share price was overdone and has created a buying opportunity.

Morgans commented: “Today’s trading update was a disappointment and has led us to lower expectations for full year earnings. The share price reaction to the statement was, however, greater than we had thought appropriate.”

The broker has an add rating and $3.70 price target on its shares. This compares to the latest Adairs share price of $3.03. And with Morgans forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023, this will mean yields of 6.3% and 8.6%, respectively.

Premier Investments Limited (ASX: PMV)

The team at Bell Potter believe this retail conglomerate’s shares could be a good option for income investors. Particularly given its strong performance during the first half of FY 2022 despite losing 42,000 trading days to COVID lockdowns.

In response to its better than expected update, Bell Potter retained its buy rating and lifted its price target to $32.00. Pleasingly, the broker appears confident its positive form can continue.

It commented: “PMV has been an outperformer throughout COVID-19, demonstrating resilient sales performance underpinned by market leading omni-channel capabilities that leverage off a wholly owned DC. We see several key positive catalysts over the next 12-24 mths including the continued rebound in Smiggle, the potential launch of Peter Alexander in new offshore markets, plus M&A opportunities. We retain our Buy rating on the stock.”

Bell Potter estimates that its shares will provide 3% and 3.1% fully franked dividend yields in FY 2022 and FY 2023, respectively.

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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 and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool Australia has recommended Premier Investments Limited. 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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