Brokers love these 2 ASX dividend shares right now

These 2 businesses are expected by experts to pay good income in the next few years.

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Key points

  • Experts like the ASX dividend shares revealed in this article 
  • GQG Partners is a large fund manager on the ASX 
  • Best & Less sells affordable clothing to families 

ASX dividend shares could be the place to find opportunities to pay attractive income for investors. There are some very large dividend-paying businesses on the ASX such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

But just because a company pays a dividend, this doesn’t automatically make it worth owning.

Here are two ASX dividend shares that are liked:

GQG Partners Inc (ASX: GQG)

GQG is one of the largest fund managers on the ASX. The US-based manager runs a number of different investment strategies including global shares, international shares, US shares and emerging market shares.

The business is rated as a buy by the broker Morgans with a price target of $2.15. That implies a potential rise of around 40%. The broker thinks it’s good value and recognises that its quarterly updates continue to show inflows.

GQG recently released its update for the period ending 31 March 2022. Over the month, it showed that funds under management (FUM) rose from US$89.8 billion to US$92.9 billion. For the three months to 31 March 2022, the ASX dividend share experienced net inflows of US$3.4 billion despite an “extremely challenging macro environment”.

In FY23, Morgans thinks that GQG is going to pay a dividend yield of 8.4%. In FY22, it could pay a yield of 7.8%.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less describes itself as a leading value apparel specialty retailer with a physical store network of 245 stores and a “fast-growing” online offering. Its aim is to be the number one choice for families buying baby and kids’ value apparel in Australia and New Zealand through two brands: Best & Less in Australia and Postie in New Zealand.

Despite all of the store closures during the first half of FY22, the company achieved growth with some of its reported financial statistics.

Like-for-like sales were up by 0.1% and online sales increased by 24%. Its gross profit margin went up by 210 basis points to 50.8%. It achieved its 2021 calendar year prospectus forecasts for earnings before interest, tax, depreciation and amortisation (EBITDA) and net profit after tax (NPAT).

With that result, the ASX dividend share declared a maiden interim dividend of 11 cents per share.

The company is focused on executing its growth strategy in the second half, by continuing to grow its market share in ‘baby’ and ‘kids’, improving the womenswear offer, investing in its online capabilities and securing new store sites.

It’s currently rated as a buy by the broker Macquarie with a price target of $4.10. That implies a potential upside of around 30% over the next year.

Macquarie believes that the Best & Less share price is valued at under 9 times FY22’s estimated earnings with a projected grossed-up dividend yield for this financial year of 12.4%.

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 has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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