The team at Morgans has been looking at the best ASX 200 index (ASX: XJO) shares to buy this month.
Among its best dividend ideas for the month of December are the two ASX 200 shares listed below. Here's what the broker is saying about them:
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Telstra Corporation Ltd (ASX: TLS)
Morgans remains very positive on this telco giant and believes it could be an ASX 200 dividend share to buy. The broker has an add rating and $4.60 price target on Telstra's shares.
Morgans is very positive on Telstra's outlook thanks to its successful turnaround and believes that its recent restructure could unlock value for shareholders. It explained:
After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] on Telstra's legal restructure, which opens the door for value to be released. […] TLS currently trades on ~7x EV/EBITDA. However some of TLS's high quality long life assets like InfraCo are worth substantially more, in our view. We don't think this is in the price so see it as value generating for TLS shareholders.
As for dividends, Morgans is expecting Telstra to continue to pay fully franked 16.5 cents per share dividends in FY 2023 and FY 2024. Based on the current Telstra share price of $4.00, this equates to yields of 4.1%.
Wesfarmers Ltd (ASX: WES)
Morgans sees this conglomerate as a dividend share to buy this month and has an add rating and $55.60 price target on its shares.
This is thanks to its high quality retail portfolio and focus on value, which could be important given the cost of living crisis. The broker explained:
WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. We believe WES's businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.
As for dividends, Morgans is expecting Wesfarmers to continue to pay fully franked dividends of $1.82 per share dividends in FY 2023 and $1.89 per share in FY 2024. Based on the current Wesfarmers share price of $47.75, this equates to yields of 3.8% and 4%, respectively.
