The Woolworths Group Ltd (ASX: WOW) share price is a popular choice for many ASX 200 investors. Woolworths shares are stalwarts of the ASX 200 after all.
This company is a blue-chip supermarket operator that has been listed on the ASX for decades, with a business that most Australians would be very familiar with. Woolworths shares also pay passive income in the form of fully-franked dividends.
But just because a company is healthily profitable, pays dividends and has a mature, built-out business model doesn't mean it is automatically a good investment.
The Woolworths share price meanwhile has had a very productive year in 2023 so far. The supermarket giant's shares have risen by an impressive 8.32% year to date as it stands today. The company is also up an even better 11.5% or so over the past three months:
But that doesn't necessarily mean that Woolworths shares are a buy today.
So, let's check out what a broker is saying about Woolworths shares right now.
ASX broker rates Woolworths shares as a buy
Goldman Sachs is an ASX broker who currently has a very favourable outlook on the Woolworths share price. As we looked at earlier this week, Goldman currently rates Woolies as a buy.
But not only that, the broker has Woolworths shares on its high conviction list, with a 21-month share price target of $41.20. If realised, that would represent a share price upside of almost 15% from the $35.86 the shares are asking today (at the time of writing).
Here's what Goldman had to say about its position:
We are Buy rated (on Conviction List) on the stock as we believe the business has one of the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations.
The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.
But not only does Goldman think Woolies shares have plenty of capital growth in store for investors, but it is also pencilling in rising passive income from the shares in the form of dividends.
The broker reckons Woolies will pay out a fully franked $1.02 in dividends per share in FY2023, rising to $1.13 per share in FY2024.
So there are both capital gains, and dividend income walking Woolworths shareholders' way if Goldman is on the money.
But as always, we'll have to wait and see what the next 12 months and beyond hold in store for this company
At the current Woolworths share price, this ASX 200 blue-chip share has a market capitalisation of $43.44 billion, with a dividend yield of 2.57%.
