This year is proving to be a volatile time for many ASX growth shares and indeed plenty of ASX dividend shares as well.
There are well-known businesses with large dividend payouts like BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).
But there could also be some that are being underrated by investors. They may be able to surprise with both earnings and dividends in FY23:
Accent Group Ltd (ASX: AX1)
Accent Group is a leading Australian shoe business that sells through a wide number of brands. Everyone needs shoes after all. Some of them are ones that it owns, whereas others are brands that Accent has exclusive distribution agreements.
Readers may recognise some of these names: CAT, Dr Martens, Glue Store, Hype, Merrell, Nude Lucy, Platypus, Skechers, Stylerunner, The Athlete's Foot, Trybe, Timberland and VANS. Reebok is a recent addition.
The ASX dividend share is proud of its omnichannel business model – that means where it can sell to customers through its growing store network as well as online. Accent has a number of growth strategies including digital, new stores, vertically-owned brands, new businesses and exclusive distribution agreements.
Whilst lockdowns impacted sales in the first half of FY22, FY23 is expected to return to stronger profitability.
According to Commsec, the Accent share price is valued at 15x FY23's estimated earnings with a projected grossed-up dividend yield of 7.7%.
Adairs Ltd (ASX: ADH)
Adairs is another business in the retail sector that struggled in the first half of FY22 with many of its stores impacted by the COVID lockdowns in NSW and Victoria. However, those lockdowns now appear to be over.
Despite those lockdowns, sales remained strong. Total sales in the first 26 weeks of FY22 were 34.1% higher than FY20, with Adairs online sales 98.3% higher and Mocka sales 77.2% higher.
The ASX dividend share recently acquired the furniture retailer Focus which has been "trading well".
Adairs management said that it has made strides in progressing its strategic priorities by commissioning its new national distribution centre, upsizing selected stores, continuing to expand its range and adding to its omnichannel capabilities. These may all help with growth and profitability.
Looking at FY23, Commsec estimates that the Adairs share price is at 8x FY23's projected earnings. In FY23 it's forecast to pay a grossed-up dividend yield of 12.3% and then 13.9% in FY24.
