Buy Rio Tinto and this ASX dividend share: Goldman Sachs

These dividend shares give investors exposure to the mining and retail sectors.

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If you're looking to boost your passive income, then you may want to check out the ASX dividend shares listed below.

Goldman Sachs has tipped these ASX shares to pay their shareholders very attractive dividends this year and next. Here's what you need to know about them:

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Rio Tinto Ltd (ASX: RIO)

The first ASX dividend share for investors to look at is mining giant Rio Tinto.

It could be a top option for investors that are not averse to investing in the mining sector. Especially given the attractive yields its shares are tipped to provide in the coming years.

In addition, Goldman Sachs believes that Rio Tinto shares are in the buy zone due to their "compelling valuation" and the company's "return to production growth in 2023."

Its analysts are forecasting fully franked dividends per share of US$4.23 in FY 2023 and then US$5.46 in FY 2024. Based on current exchange rates and the latest Rio Tinto share price of $124.44, this will mean yields of 5% and 6.5%, respectively.

Goldman Sachs has a buy rating and lifting its price target to $131.70.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that has been named as a buy by Goldman Sachs is youth fashion retailer Universal Store.

It is a fan of the company due to its exposure to younger consumers, which are less impacted by rising mortgage payments. Combined with an increase to the minimum wage, the broker believes they will continue to spend as normal despite the cost of living crisis.

This certainly has been the case so far in FY 2023. Last month, the company released its half-year results and reported a 34.5% increase in sales to $145.7 million and a 43.2% jump in earnings before interest and tax (EBIT) to $28.5 million.

In response to the result, Goldman retained its buy rating with an improved price target of $8.05.

As for dividends, its analysts now expect fully franked dividends of 27 cents in FY 2023 and 34 cents in FY 2024. Based on the latest Universal Store share price of $5.47, this equates to yields of 4.9% and 6.2%, respectively.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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