One of the great things about ASX dividend shares is that, even during stock market downturns, it's still possible to grow your wealth.
Whilst your portfolio might not be increasing in value from share price rises, it may still be growing from dividend payments or reinvestment allocations.
In fact, many young investors who once viewed ASX dividend shares as the exclusive domain of boomers or those approaching retirement are now eyeing these types of stocks in a completely new light.
So, if you're looking to pounce on some new passive-income investments this month, read on! Because we asked our Foolish writers which ASX dividend stocks they reckon could be worth 'paw-ring' over in April.
Here is what the team came up with:
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7 best ASX dividend shares for April 2023 (smallest to largest)
- Nick Scali Limited (ASX: NCK), $757.35 million
- Rural Funds Group (ASX: RFF), $768.50 million
- National Storage REIT (ASX: NSR), $3.36 billion
- Domino's Pizza Enterprises Ltd (ASX: DMP), $4.44 billion
- Harvey Norman Holdings Limited (ASX: HVN), $4.46 billion
- Rio Tinto Ltd (ASX: RIO), $44.60 billion
- Commonwealth Bank of Australia (ASX: CBA) $166.00 billion
(Market capitalisations as of 31 March 2023).
Why our Foolish writers love these ASX passive-income stocks
Nick Scali Limited
What it does: Quality furniture in Australia has almost become synonymous with the Nick Scali brand, I believe. Founded in 1962, the furniture retailer has grown to 107 stores (including Plush), making it one of the largest operators in the sector within the country.
By Mitchell Lawler: Looking at how this ASX 300 dividend share has been performing lately, you'd almost think business for Nick Scali was heading the way of the dinosaurs.
Between November 2021 and today, the Nick Scali share price has tumbled by around 42%. Yet, the latest numbers from the retailer paint a different story. Revenue surged 57% year on year to $283.9 million, and net after-tax earnings leapt 70%.
The disconnect has culminated in a current dividend yield of 8.5% on a payout ratio of 60%. It's probable the market is expecting weakness in sales from here as consumer spending slows – which might be the case.
But even still, at an earnings multiple of 7.3 times, I think there is a fair bit of wiggle room there for Nick Scali to surprise the market.
Motley Fool contributor Mitchell Lawler does not own shares in Nick Scali Limited.
Rural Funds Group
What it does: Rural Funds is a real estate investment trust (REIT) that owns a variety of different types of farms, including those producing almonds, macadamias, sugar, cotton, wine, and cattle.
By Tristan Harrison: The Rural Funds share price has dropped by around 37% since the start of 2022. That has opened up the opportunity to buy a piece of these quality farms for a much cheaper price and, at the same time, get a much higher distribution yield.
The forecast total FY23 distribution yield is now more than 6%. If Rural Funds can keep growing its distribution by 4% or more per annum – which it has done since FY16 thanks to organic rental income growth and productivity investments – then I think the business can deliver a good total return from here.
Farmland has been a valuable asset for many centuries, and I think this will continue to be the case for a long time to come as the global population grows.
Motley Fool contributor Tristan Harrison owns shares in Rural Funds Group.
National Storage REIT
What it does: Another REIT, National Storage does pretty much what it says on the tin: It operates self-storage centres and garages, as well as providing other related services.
By Sebastian Bowen: I think this ASX 200 REIT is well worth a look for income investors right now.
I like companies that provide goods and services customers will utilise in all economic seasons, not just when times are good. National Storage fits this mould well, in my view.
Self-storage is a highly fragmented industry, but National Storage has proven it is adept at acquiring market share and expanding further and further. In February, the REIT announced a capital-raising program to continue this expansion.
National Storage's dividend distributions have kept up though, with the REIT paying out a total of 10.9 cents per unit in 2022, a good 11.2% above what it paid out in 2019.
Considering this REIT's dividend yield of more than 4% right now, I think National Storage could be a great addition to a diversified ASX income portfolio this April.
Motley Fool contributor Sebastian Bowen does not own units of National Storage REIT.
Domino's Pizza Enterprises Ltd
What it does: Domino's operates a chain of fast-food pizza outlets. The company controls the Domino's network in Australia, New Zealand, Japan, Taiwan, Germany, France, Denmark, Belgium, Luxembourg, and the Netherlands. It also has a growing footprint in Southeast Asia.
By Bernd Struben: The Domino's share price is down 41% over the past 12 months. The company has struggled with the effects of inflation, particularly in Europe. In its half-year results, Domino's reported rising costs drove a 21.5% decline in underlying net profit after tax (NPAT) to $71.7 million.
This also saw a 23.8% cut in Domino's partially franked interim dividend, which dipped to 67.4 cents per share.
But I believe the medium-term outlook is better. On the back of a $165 million capital-raising announced in December, Domino's is well-positioned for growth. It plans to use those funds to help acquire the portion of its German joint venture partner it doesn't already own.
Based on the Domino's share price of $49.84 at Friday's close, the company pays a partly-franked trailing yield of 2.7%.
Broker Morgans has an add rating on Domino's shares with a target price of $70. That's around 40% above the current share price.
Motley Fool contributor Bernd Struben does not own shares in Domino's Pizza Enterprises Ltd.
Harvey Norman Holdings Limited
What it does: Harvey Norman operates its namesake furniture and technology retail franchise and also boasts a notable property portfolio.
By Brooke Cooper: The Harvey Norman share price has tumbled 9% year to date. I think the selloff might represent a buying opportunity for ASX dividend investors.
The company currently boasts a $4.5 billion market capitalisation. However, its property portfolio carries a $3.9 billion valuation, while its retail business brought in $4.98 billion of sales in the first half.
That – as well as the stock's price-to-earnings (P/E) ratio of 8.15 – suggests the company might be a value buy. And Goldman Sachs appears to agree, slapping Harvey Norman shares with a buy rating and a $4.70 price target.
Did I mention Harvey Norman shares currently offer an 8.5% dividend yield?
Motley Fool contributor Brooke Cooper does not own shares in Harvey Norman Holdings Limited.
Rio Tinto Ltd
What it does: Rio Tinto is one of the world's largest miners, with a diverse collection of world-class operations across many locations and commodities.
By James Mickleboro: I think Rio Tinto shares could be a great option for ASX dividend investors in April.
I believe the mining giant is well-placed to generate strong free cash flow for the foreseeable future thanks to strong, ongoing demand for its commodities.
The company highlights that its aluminium is used in lightweight cars, its copper ends up in renewables, and its lithium will power electric vehicles and battery storage.
In addition, Rio's high-grade iron ore looks likely to be in demand as China recovers from the pandemic, and its borates will be used to help crops grow and feed the world's growing population.
Goldman Sachs is positive on Rio Tinto shares and has a buy rating and $140.40 price target on the company. The broker also forecasts fully-franked dividend yields of approximately 6.6% in FY2023 and 7.4% in FY2024.
Motley Fool contributor James Mickleboro does not own shares in Rio Tinto Ltd.
Commonwealth Bank of Australia
What it does: Commonwealth Bank is Australia's largest bank, offering a variety of services to business and retail customers. It's also the second-largest company in the S&P/ASX 200 Index (ASX: XJO) by market cap.
By Bronwyn Allen: All the drama with banks in the United States and Europe led to share price dips of 5% to 10% for the big four ASX bank shares during March.
But, arguably, there was no reason for it.
Australia has one of the strongest banking systems in the world, so I believe the collapse of a tech lender and a crypto lender in the US and a Swiss bank plagued with problems is no reason to sell your ASX bank stocks.
I say buy the dip and buy the best: Commonwealth Bank.
CBA has just paid out its biggest interim dividend on record at $2.10 per share, and Goldman Sachs is tipping a bigger final dividend to follow at $2.58 per share. All up, that will be $4.68 per share in total.
Based on today's CBA share price of just over $98, that's a 4.8% fully-franked dividend yield, which is very good for an ASX blue chip company of this size. Especially one like CBA, which is typically bought for its long-term growth potential, not necessarily its dividends.
Motley Fool contributor Bronwyn Allen owns shares in Commonwealth Bank of Australia.
