Analysts have been running the rule over a number of ASX dividend shares recently.
Two that have been tipped as buys are listed below. Here's why they are bullish on them:
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Accent Group Ltd (ASX: AX1)
Goldman Sachs is a fan of this footwear and youth apparel retailer and believes it is an ASX dividend share to buy.
The broker is positive on the company due largely to its exposure to younger consumers. It expects Accent's target demographic to continue spending largely as normal in 2023 due to a rise in the minimum wage and their lower exposure to rising interest rates. It commented:
In aggregate, we believe this cohort has an additional ~A$1bn in spending capacity: the combination of minimum wage uplifts and limited inflationary pressures has resulted in an additional ~A$570-930 in annual spending capacity (per person) among the cohort of young adults who work and live at home.
Goldman is expecting this to lead to fully franked dividends of 12.2 cents per share in FY 2023 and 13.5 cents per share in FY 2024. Based on the current Accent share price of $2.07, this will mean yields of 5.9% and 6.5%, respectively.
Goldman has a buy rating and $2.75 price target on the company's shares.
Coles Group Ltd (ASX: COL)
Analysts at Morgans have named this supermarket operator as a buy. Its analysts have an add rating and $19.50 price target on its shares.
Morgans thinks Coles' shares are attractively priced. Particularly given its defensive qualities and the prospect of tough economic times. It explained:
Trading on 20.6x FY23F PE and 4.0% yield, we continue to see COL as offering good value with the company's solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment. The unwinding of local shopping should also help further market share gains.
And while a recent rise in the Coles share price means that it won't quite offer a 4% yield now, it isn't far off. Morgans expects a fully franked dividend of 64 cents per share in FY 2023 and a fully franked dividend of 66 cents per share in FY 2024. Based on the current Coles share price of $17.97, this will mean yields of 3.6% and 3.7%, respectively.
