The good news for income investors is that there are a number of quality ASX dividend shares to choose from on the ASX 200 index.
Two that have been tipped as strong buys are listed below. Here's what analysts are saying about them:
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Elders Ltd (ASX: ELD)
The first ASX 200 dividend share that could be a strong buy is Elders.
Goldman Sachs currently has a conviction buy rating and $18.40 price target on the agribusiness company's shares.
Its analysts believe that recent share price weakness has been unwarranted and has created a buying opportunity for investors. It commented:
We view the share price reaction […] as unwarranted. The fundamentals of this company remain unchanged, and strong in our view. The Australia agricultural environment is structurally strong and ELD is uniquely placed to benefit as a highly diversified Agribusiness with broad geographic and segment exposure. Farmer balance sheets and industry data are showing strong intentions for investment and expanded production in the context of a tightening global agricultural market.
In respect to dividends, the broker is expecting fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $9.99, this will mean yields of 5.3% and 5.7%, respectively.
Westpac Banking Corp (ASX: WBC)
Another ASX 200 dividend share that has been named as a strong buy is banking giant Westpac.
The banking giant has been included on Morgans' best ideas list with an add rating and $25.80 price target. This compares to the latest Westpac share price of $23.44.
Morgans likes Australia's oldest bank due to its business transformation initiatives. It commented:
We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.
As for dividends, the broker is forecasting fully franked dividends per share of 153 cents in FY 2023 and 159 cents in FY 2024. Based on the current Westpac share price, this will mean yields of 6.5% and 6.8%, respectively.
