Brokers have lifted the lid on where they think some good dividend payouts are going to come from over the next year or two. Two ASX dividend shares may offer plenty of upside, according to the experts.
Investors may already know about some of the biggest dividend payers on the ASX, such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
However, these two ASX dividend shares are also expected to pay solid and growing dividends.
GQG Partners Inc (ASX: GQG)
GQG Partners is one of the larger fund managers on the ASX. It has a market capitalisation of $4.1 billion, according to the ASX.
The fund manager offers several different potential investment funds such as US shares, global shares, quality dividends, and so on.
Since the start of 2022, the GQG share price has fallen more than 20%. This has had the effect of pushing up the prospective dividend yield.
It's currently rated as a buy by the broker Morgans with a price target of $2.27. That implies a potential upside of more than 60% over the next year.
The broker thinks that GQG has managed to show ongoing good fund inflows and investment performance, despite the volatility in market conditions.
In the latest monthly funds under management (FUM) update, the ASX dividend share said that over February 2022, its FUM had fallen from US$91.3 billion to US$89.8 billion. Despite all of the market volatility, it still experienced US$1.6 billion of FUM inflow over the month.
Morgans thinks that GQG has a forecast dividend yield of 7.25% in FY23.
Bapcor Ltd (ASX: BAP)
Bapcor is a large auto-parts business. It claims to be the leading player in Australasia.
It operates various brands, including Autobarn, Autopro, Midas, ABS, Shock Shop, Battery Town, Burson Auto Parts, AAD, Bearing Wholesalers, Baxters, MTQ, BNT, Truckline and WANO.
The company is looking to expand its store network both domestically and abroad. In FY21, it had around 1,100 locations. Over the next five years it wants to grow that number to more than 1,500. The company is also investing in refurbishing its store network as well.
The ASX dividend share wants to increase the market share of its own-brand products, which typically come with higher margins. Bapcor is also working on supply chain initiatives that can help it become more efficient and profitable.
Bapcor Asia has two parts. It has a small but growing network of Bursons in Thailand, currently eight stores and is looking to add more. It opened its first store outside of Bangkok in October. Thailand sales were 85% higher in the second quarter of FY22 compared to the first, as lockdown measures eased.
The company also owns 25% of Singapore-listed Tye Soon. That's an auto parts business with around 60 locations across Southeast Asia and Northeast Asia, notably in South Korea and Malaysia.
Bapcor has grown its dividend every year since FY15. The FY22 interim dividend was increased by 11.1% to 10 cents per share.
UBS thinks that the Bapcor share price is a buy, with a price target of $8.10. That implies a potential upside of around 30%. The broker doesn't think that high petrol prices will impact the business much.
UBS has pencilled in a grossed-up dividend yield of 4.8% from Bapcor in FY23.
