Brokers evaluate many different ASX shares to consider whether they are an opportunity. Some ASX dividend shares are being rated as buys right now.
The below businesses currently have buy ratings and also are expected to pay noteworthy dividends:
Nine Entertainment Co Holdings Ltd (ASX: NEC)
Nine is one of the largest media businesses in Australia. It owns the Nine TV network, newspapers including the Sydney Morning Herald, The Age, and the Australian Financial Review, as well as streaming service Stan, and various other media. Nine also owns a significant portion of Domain Holdings Australia Ltd (ASX: DHG).
The ASX dividend share is currently rated as a buy by at least four brokers, including UBS. The broker thinks that when considering the Domain shareholding, which accounts for just over a quarter of Nine's value, the rest of the Nine business looks good value. The price target is $3.90.
Ord Minnett is another broker that likes Nine, with a buy rating and a price target of $3.65. This broker has estimated a grossed-up dividend yield of 5.9% in FY22.
In the FY22 half-year result, Nine reported revenue growth of 15% to $1.33 billion and net profit after tax (NPAT) growth of 20% to $225 million. It grew its interim dividend by 40% to 7 cents per share. That dividend alone represented a grossed-up dividend yield of 3.4% at the current Nine Entertainment share price.
On UBS's numbers, the Nine Entertainment share price is valued at 15x FY22's estimated earnings.
Metcash Limited (ASX: MTS)
Metcash is a diversified hardware business and wholesale supplier. It supplies IGA supermarkets across the country. Metcash also supplies various liquor retailers including Cellarbrations, The Bottle-O, IGA Liquor, Duncans, and Thirsty Camel. Finally, there are three businesses in its hardware division – Mitre 10, Home Timber & Hardware, and Total Tools.
The ASX dividend share is currently rated as a buy by the broker UBS. It acknowledges that the business has invested in its operations. Further, a highlight for the broker is the hardware division which is growing profit quickly.
UBS thinks that Metcash is going to pay a grossed-up dividend yield of 5.7% in FY22 and 6% in FY23.
Metcash has a target dividend payout ratio of around 70% of underlying net profit after tax. It grew its FY22 interim dividend by 31% to 10.5 cents per share. The ASX dividend share says that it has a strong focus on shareholder returns.
In Metcash's HY22 report, it saw 13.1% growth of underlying NPAT to $146.6 million, with 13.9% earnings before interest and tax (EBIT), growth to $231.2 million. Hardware EBIT surged 53.3% to $98.9 million.
The company continues to invest in its supply chain and digital operations to help grow the business.
According to UBS, the current Metcash share price is valued at 16x FY22's estimated earnings.
