Are you looking for some dividend options for your income portfolio next week? If you are, then take a look at the two ASX 200 dividend shares listed below that analysts at Goldman Sachs rate as strong buys.
Here's why the broker is positive on them:
Elders Ltd (ASX: ELD)
The first ASX 200 dividend share to that the broker rates highly is Elders. It is an agribusiness company that provides services to rural and regional customers across the ANZ region.
Goldman Sachs likes the company due to its positive growth outlook, acquisition opportunities, and its margin expansion potential. The broker commented:
We view ELD as well-positioned to achieve continued organic growth through market rationalisation and margin expansion as the company executes on the backward integration strategy, which it is c.50% of the way through. Organic growth looks set to be complemented by further bolt-on acquisitions, with c.620 independents in the Australian market with a steady stream of founders now looking at succession or exit opportunities. We forecast a further +7% EBIT growth in FY23 vs. Bloomberg consensus of -13%.
In respect to dividends, Goldman is forecasting dividends per share of 50 cents in FY 2022 and 53 cents in FY 2023. Based on the current Elders share price of $12.51, this would mean yields of 4% and 4.2%, respectively.
Goldman Sachs also sees plenty of upside ahead for its shares. It currently has a conviction buy rating and $21.00 price target on them.
Westpac Banking Corp (ASX: WBC)
Another ASX 200 dividend share that Goldman Sachs rates as a strong buy is banking giant Westpac.
The broker likes Australia's oldest bank due to its major cost cutting programme and exposure to rising rates. It explained:
We continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) while we think its A$8 bn FY24 cost target will now be unachievable, we still forecast a 7% reduction in underlying expenses, iii) its recent market update highlighted that the business is still investing effectively in its franchise.
As for dividends, Goldman is forecasting fully franked dividends per share of 123 cents in FY 2022 and 135 in FY 2023. Based on the current Westpac share price of $21.88, this will mean yields of 5.6% and 6.2%, respectively.
Goldman also has Westpac on its conviction list. The broker currently has a conviction buy rating and $26.12 price target on the bank's shares.
