The ASX share market has seen plenty of volatility this year. Some businesses have seen heavy declines, while others have hardly moved. A few have actually gone up. Could ASX dividend shares be the way to go for the rest of the year?
Over the 2022 year so far, some of the biggest declines belong to the likes of the Xero Limited (ASX: XRO) share price falling 50% and the Domino's Pizza Enterprises Ltd (ASX: DMP) share price falling 58%.
Others have done better. For example, the Rio Tinto Limited (ASX: RIO) share price is only down 2% and the National Australia Bank Ltd (ASX: NAB) share price is up approximately 1%.
What's the outlook for ASX dividend shares?
I'll split my thoughts up into sections on different sectors.
ASX banks
Plenty of the most popular ASX dividend shares are ASX bank shares. Names like Commonwealth Bank of Australia (ASX: CBA), NAB, Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are all from the banking sector.
I think the short-term continues to look promising for these banks because interest rates keep being increased by the Reserve Bank of Australia (RBA). This should help lending margins, increasing profitability for the banks. So, that is likely to be good for 2022. But, beyond that, it could make things tricky for some borrowers who can't afford the much higher rates.
Miners
Then there are ASX dividend shares like the miners such as BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto. While the iron ore price is substantially lower than it was earlier in the year, the current price of more than US$90 per tonne allows them to continue generating pretty good profit and cash flow, therefore paying attractive dividends.
Retailers
ASX retail shares have seen a hefty sell-off during 2022. A lower price can help boost the prospective dividend yield from retailers. Names like Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK) have all seen pain this year.
While it's likely that retailers aren't going to see as strong conditions as in FY21, I think that the hefty sell-off means that plenty of retail ASX dividend shares are now long-term opportunities at this lower level. But, I am expecting a lower profit generation. But, the first half of FY23 could show growth for retailers because it's compared against locked-down periods in FY22.
Others
Looking at two other major ASX dividend shares, I think that both Telstra Corporation Ltd (ASX: TLS) shares and Woodside Energy Group Ltd shares (ASX: WDS) can continue being solid over the rest of the year.
Telstra is looking to further reduce costs, increase subscribers, grow profit margins and grow its mobile charges in line with inflation. Woodside has benefited from higher energy prices, but there doesn't seem to be an end to the Ukraine conflict in sight, which has boosted names like Woodside.
Summary thoughts on ASX dividend shares
Overall, I am suggesting that plenty of ASX dividend shares look promising at the current prices for the rest of the year.
