If you're looking for ASX dividend shares with big yields, then you may want to consider the ones listed below.
Here's why analysts at Morgans rate these high yield dividend shares as buys.
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Adairs Ltd (ASX: ADH)
The first high yield ASX dividend share for investors to consider is Adairs. It is the leading furniture and homewares retailer behind the online-only Mocka brand, the recently acquired Focus on Furniture brand, and the eponymous Adairs brand.
These brands give Adairs a strong position in a category that is benefitting from the shift online. It is also benefitting from structurally higher spending on the home relative to pre-COVID levels.
While FY 2022 will be tough because of COVID headwinds, the team at Morgans expect a swift rebound in FY 2023.
Morgans commented:
In FY23, we expect Focus to have bedded down and to have started a strategy of improving store economics while expanding its footprint. We expect the NDC [national distribution centre} to be up and running and delivering efficiencies. We expect Mocka to be making its first steps towards an omni-channel strategy. These factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple.
Morgans currently has an add rating and a $3.50 price target on Adairs shares. It is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents in FY 2023.
Based on the current Adairs share price of $2.76, this will mean yields of 6.9% and 9.4% respectively.
Westpac Banking Corp (ASX: WBC)
Another high yield ASX dividend share to consider buying is Westpac. This banking giant's shares have come under pressure recently due to margin weakness and cost-cutting doubts.
Morgans is positive on Australia's oldest bank and sees the recent share price weakness as a buying opportunity.
Morgans said:
WBC is our preferred major bank. We believe WBC offers the most compelling valuation of the major banks. In terms of quality of overall risk profile, we believe WBC is a close second to CBA. On credit risk, we believe WBC is positioned relatively defensively due to its loan book being more skewed to Australian home lending.
Morgans currently has an add rating and a $29.50 price target on Westpac shares.
The broker has pencilled in fully franked dividends per share of $1.19 in FY 2022 and $1.60 in FY 2023. Based on the current Westpac share price of $21.96, this will mean yields of 5.4% and 7.3% respectively.
