If you're looking to lift 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 big dividends this year and next. Here's what you need to know about them:
Harvey Norman Holdings Limited (ASX: HVN)
Goldman Sachs remains very positive on this ASX dividend share.
It likes the retail giant due to its belief that it is well-placed to fend off online competition due to its exposure to regional markets and older customer base.
Harvey Norman holds a unique position within the electronics and appliances retail industry as a result of its franchise model of operations in Australia, property portfolio and regional exposure. While we do not view HVN as the most advanced retailer on digitalization, we view HVN as a more defensive option that is under-valued in the home category.
The broker expects this to allow Harvey Norman to pay fully franked dividends per share of 36 cents in FY 2023 and then 30 cents in FY 2024. Based on the current Harvey Norman share price of $3.69, this will mean massive yields of 9.75% and 8.1%, respectively.
Goldman has a buy rating and $4.70 price target on its shares.
Rio Tinto Ltd (ASX: RIO)
Another ASX dividend share that Goldman Sachs is bullish on is mining giant Rio Tinto.
Its analysts see a lot of value in its shares and are expecting some very big yields in the coming years. Goldman commented:
We are Buy rated on RIO and add to the CL due to: (1) compelling relative valuation vs. peers (0.9xNAV vs. BHP 1.05xNAV and FMG 1.5xNAV), (2) strong FCF and Div yield with our bullish view on iron ore, aluminium and copper prices, (3) strong production growth from iron ore and copper (+8% Cu Eq terms in 2023E, +5% in 2024E), (4) the potential for FCF/t improvement in the Pilbara in 2023 with Guida-darri and over the medium to long run driven by Rhodes Ridge, and (5) World's highest margin low emission aluminium business.
Its analysts are forecasting fully franked dividends per share of US$5.33 in FY 2023 and then US$5.98 in FY 2024. Based on current exchange rates and the latest Rio Tinto share price of $113.75, this will mean yields of 7% and 7.9%, respectively.
Goldman Sachs has a buy rating and $140.40 price target on its shares.
