2 ASX dividend shares to buy this month: expert

Which two shares does this expert like for the dividend rewards?

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Here are two ASX dividend shares expected to pay large dividends in the near future
  • One broker likes the look of furniture retailer Nick Scali for its healthy order book
  • Diversified commercial landlord Charter Hall Long WALE REIT is the other expert pick

ASX dividend shares can offer attractive opportunities, according to experts.

They reckon it’s possible for a business to grow its profit and/or underlying value over the long term while also paying attractive dividends to investors.

Experts have made projections on two businesses expected to pay large dividend yields in the coming years. Let’s check them out.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the larger furniture retailing businesses on the ASX. It operates through two different brands – Nick Scali and Plush-Think Sofas.

Broker Citi currently rates Nick Scali as a buy with a price target of $17.60. That implies a possible rise of around 60%.

Citi thinks that Nick Scali will pay a grossed-up dividend yield of 9.9% in FY22 and 10% in FY23.

One reason for Citi’s positivity is the ASX retail share’s healthy-looking order book.

Since the start of the year, the Nick Scali share price has fallen by around 30%, which increases the prospective dividend yield.

Nick Scali is working on its online sales, which come with an elevated earnings before interest, tax, depreciation and amortisation (EBITDA) margin. In the first six months of FY22, Nick Scali generated $13.7 million of online revenue, with an incremental earnings before interest and tax (EBIT) contribution of $8 million.

The company also wants to grow its store network over the long term, from 108 in December 2021 to between 176 and 186 stores.

Management also sees opportunities in the Plush acquisition with supply chain synergies and the store rollout.

Charter Hall Long WALE REIT (ASX: CLW)

This is real estate investment trust (REIT) owns a diversified portfolio across a number of real estate sectors. The thing that links them all together is that the properties have long-term rental contracts, which helps the weighted average lease expiry (WALE).

Those properties are spread across sectors like office, industrial, retail, agri-logistics and telecommunication exchanges. Charter Hall says that the focus is on key defensive tenant industries that are resilient to economic shocks.

The ASX dividend share has several major tenants, including Endeavour Group Ltd (ASX: EDV), federal and state government agencies, Telstra Corporation Ltd (ASX: TLS), BP, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), David Jones, Metcash Limited (ASX: MTS) and Arnott’s Group.

In the FY22 half-year result, it finished with a WALE of 12.2 years, providing “long-term income security”.

For FY22, it’s expecting to achieve operating earnings per share (EPS) of no less than 30.5 cents, reflecting growth of at least 4.5%. This would be a distribution of at least 5.75%.

Charter Hall REIT is currently rated as a buy by the broker Citi, with a price target of $5.71. The broker thinks that the REIT could pay a distribution of 5.8% in FY23.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

a woman with a huge happy smile on her face eyes a jar of coins next to her on a table.
Dividend Investing

Experts name 2 ASX dividend shares to buy next week

These dividend shares have been named as buys...

Read more »

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.
Dividend Investing

These 2 ASX 200 shares are going ex-dividend next week

We take a look at the two ASX 200 shares trading without rights next week.

Read more »

A happy construction worker leap-frogs over another as a third looks on
Dividend Investing

Locked in the CSR dividend? Here’s the payment info

Own CSR shares? It's time to check your bank account.

Read more »

A woman puts money in her piggy bank all rugged up for the winter cold.
Dividend Investing

ANZ rewards shareholders with its latest dividend. Here are the details

Payday has come for those who are eligible for the bank's dividend.

Read more »

Dividend Investing

2 excellent ASX dividend shares that analysts rate as buys in July

Here are two dividend shares rated as buys...

Read more »

Two women shoppers smile as they look at a pair of earrings in a costume jewellery store with a selection of large, colourful necklaces made of beads lined up on a display shelf next to them.
Dividend Investing

Here’s why I think Lovisa could be a top ASX dividend share

This retail ASX share could provide good dividend income for investors.

Read more »

Gold bars and Australian dollar notes.
Resources Shares

Do Evolution Mining shares pay a dividend?

The ASX 200 mining shares are known as good dividend payers -- is Evolution among them?

Read more »

a pile of colourful trainer shoes and sandshoes fashioned to look like a large shoe.
Retail Shares

What is the current dividend yield for Accent shares?

What kinds of dividends is Accent Group paying these days?

Read more »