Looking for dividend shares to buy? Listed below are two ASX dividend shares that Goldman Sachs rates as buys.
Here's why the broker is bullish on these dividend shares:
Adairs Ltd (ASX: ADH)
The first ASX dividend share that Goldman Sachs is bullish on is Adairs. The broker has a buy rating and $2.65 price target on the furniture and homewares retailer's shares.
Goldman believes its shares have been unnecessarily oversold, creating a buying opportunity for income investors. Particularly given its belief that the company can achieve guidance this year. The broker explained:
We view the re-affirmed guidance as a key positive for ADH, and we believe the market is pricing in EBIT that is 11-21% below the guidance range, and 12% below GSe. We view the core Adairs business as resilient in the current environment and do not believe the c.40% discount to discretionary retail peers is justified.
In respect to dividends, Goldman is forecasting fully franked dividends per share of 17 cents in FY 2023 and 20 cents in FY 2024. Based on the latest Adairs share price of $2.20, this will mean yields of 7.7% and 9.1%, respectively.
Mineral Resources Limited (ASX: MIN)
Another ASX dividend share that Goldman Sachs is bullish on is this mining and mining services company. It has a buy rating and $94.00 price target on its shares.
The broker is a fan of the company due to its lithium exposure, which it expects to support the tripling of its operating earnings and a big dividend increase in FY 2023.
We forecast a more than tripling of group EBITDA to over A$3.8bn in FY23 (same at spot) driven by higher lithium volumes (LiOH & spod), tailwinds from M-3 lithium pricing lags, and an improvement in low grade iron ore price realisations.
As for dividends, the broker has pencilled in fully franked dividends of 437 cents per share in FY 2023 and then 433 cents per share in FY 2024. Based on the latest Mineral Resources share price of $85.33, this will mean yields of 5.1% and 5%, respectively.
