If you're an income investor in search for dividend shares to buy to overcome inflation, then you may want to look at the ones listed below.
Analysts are very positive on these dividend shares and are forecasting attractive yields from them in the coming years. Here's what you need to know:
Adairs Ltd (ASX: ADH)
Adairs could be a dividend share to buy, particularly with its shares trading 40% lower in 2022. It is a leading furniture and homewares retailer behind the Focus on Furniture, Mocka, and eponymous Adairs brands.
The weakness in the Adairs share price has been driven by a combination of market volatility and the company's underperformance in FY 2022 due to COVID headwinds.
While the latter is disappointing, analysts at Morgans are expecting the retailer to bounce back in FY 2023. Especially given the recent acquisition of Focus on Furniture and the launch of its new national distribution centre.
In light of this, the broker is forecasting big dividends from Adairs in the coming years. It has pencilled in fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.42, this will mean yields of 7.9% and 10.7%, respectively.
Morgans also sees plenty of upside for the company's shares with its add rating and $3.50 price target.
Telstra Corporation Ltd (ASX: TLS)
Another ASX dividend share to consider is Telstra. Australia's largest telecommunications company could be a great option for income investors given its defensive qualities and attractive yield.
In addition, while Telstra still has plenty of work to do, its outlook is now arguably the most positive it has been in a decade. This is thanks to the success of its T22 strategy which ends this year and the potential of its upcoming T25 strategy.
Management is very confident in its plans and expects the T25 strategy to deliver solid and sustainable growth in the coming years. This could bode well for Telstra's dividends.
In the meantime, the team at Morgan Stanley is expecting fully franked 16 cents per share dividends again in FY 2022 and FY 2023. Based on the current Telstra share price of $3.87, this will mean yields of 4.2%.
In addition, Morgan Stanley sees a lot of value in its shares at the current level. It has an overweight rating and $4.60 price target.
