Looking for dividends shares for you income portfolio? If you are, you may want to get better acquainted with the two listed below that have been rated as buys by Citi.
Here's what you need to know about these ASX dividend shares:
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Baby Bunting Group Ltd (ASX: BBN)
The first ASX dividend share to consider is Baby Bunting. It is the leading baby products retailer with a strong and growing presence through its national superstores and online business. It is exposed to a less discretionary category which benefits from ~300,000 births a year in Australia.
Citi is very positive on Baby Bunting and sees plenty of growth ahead for the retailer.
It recently commented: "We see Baby Bunting well placed to outperform the broader small cap retail sector this year given the non-discretionary nature of its category. While the FY22 PE multiple of 24x (or 29x when adjusted for transformation costs) is not cheap, we forecast a FY21 to FY24 EPS CAGR of 17%."
The broker currently has a buy rating and $6.22 price target on the retailer's shares. As for dividends, Citi has pencilled in fully franked dividends per share of 16 cents in FY 2022 and 19 cents in FY 2023. Based on the current Baby Bunting share price of $4.46, this will mean yields of 3.6% and 4.3%, respectively.
Coles Group Ltd (ASX: COL)
Another ASX dividend share that could be in the buy zone is Coles. It is of course one of Australia's biggest retailers with a huge network of supermarkets, liquor stores, and express stores.
Coles could be a top option for investors thanks to its solid long term growth potential. This is being underpinned by its strong market position, refreshed strategy, long track record of same store sales growth, and its focus on automation.
In addition, Coles has a favourable dividend policy, which aims to payout 90% of earnings to shareholders.
Citi is also a fan of Coles and currently has a buy rating and $19.30 price target on its shares. In respect to dividends, the broker has pencilled in fully franked dividends per share of 65 cents in FY 2022 and 72 cents in FY 2023.
Based on the current Coles share price of $17.18, this will mean yields of 3.8% and 4.2%, respectively.
