Broker names 2 of the ‘best’ ASX dividend shares to buy next week

These dividend shares could be quality options for income investors…

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If you’re looking at dividend shares to buy, then you may want to check out the ones listed below that are on a Morgans’ best ideas list this month.

Here’s why these ASX shares could be among the best dividend shares to buy next week:

BHP Group Ltd (ASX: BHP)

The first ASX dividend share to look at is the Big Australian. This mining giant has been tipped to pay big dividends in the near term thanks to sky high commodity prices.

For example, Morgans is expecting BHP to pay fully franked dividends per share of $3.93 in FY 2022 and $2.95 in FY 2023. Based on the current BHP share price of $46.80, this will mean yields of 8.4% and 6.3%, respectively.

Morgans also sees meaningful upside for its shares and has an add rating and $54.30 price target on them. The broker explained why it is bullish:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct Covid-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that Morgans rates highly is this conglomerate. Morgans likes the company due to its quality portfolio, strong management team, and robust balance sheet.

As for dividends, the broker expects fully franked dividends of $1.62 per share in FY 2022 and $1.81 per share in FY 2023. Based on the current Wesfarmers share price of $49.60, this will mean yields of 3.3% and 3.65%, respectively.

As with BHP, the broker also sees decent upside for its shares. It has an add rating and $58.50 price target on them. The broker commented:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the recent pullback in the share price as a good entry point for longer term investors.

Motley Fool contributor James Mickleboro 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 positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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