If you're an income investor in search of dividend shares to buy to combat rising 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:
Baby Bunting Group Ltd (ASX: BBN)
The first ASX dividend share to consider is leading baby products retailer, Baby Bunting.
Thanks to its leadership position in a less discretionary category which benefits from around 300,000 births a year, Baby Bunting has been tipped to continue growing at a solid rate over the coming years.
Citi is particularly bullish on Baby Bunting and currently has a buy rating and $6.22 price target on its shares.
The broker commented: "[W]e forecast a FY21 to FY24 EPS CAGR of 17%, and see growth being driven by i) rollout, ii) ramp up of new stores, iii) margin expansion and iv) penetrating existing categories with low presence. Further, the stocks growth prospects are in some respects less risky than other high multiple retailers who are relying more on new markets and acquisitions."
As for dividends, Citi has pencilled in fully franked dividends per share of 16 cents in FY 2022 and 19 cents in FY 2023. Based on the current Baby Bunting share price of $4.17, this will mean yields of 3.8% and 4.5%, respectively.
Telstra Corporation Ltd (ASX: TLS)
Another top ASX dividend share to consider is Telstra. It is of course Australia's largest telecommunications company.
Telstra could be a great option in the current environment given its defensive qualities and attractive yield. In addition, Telstra's outlook is now arguably the most positive it has been in over 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.
For now, though, the team at Ord Minnett is expecting fully franked 16 cents per share dividends again in FY 2022 and FY 2023. Based on the current Telstra share price of $3.82, this will mean yields of 4.2%.
In addition, Ord Minnett sees a lot of value in its shares at the current level. Earlier this week it reiterated its buy rating with a $4.65 price target.
