While receiving income from your ASX shares is great, receiving a lot is better!
Two shares that have been rated as buys and tipped to provide investors with big dividend yields are listed below.
Here's what analysts are saying about these dividend shares right now:
Rio Tinto Ltd (ASX: RIO)
Goldman Sachs is forecasting a big dividend yield from this mining giant's shares in FY 2023 and FY 2024.
The broker is expecting fully franked dividends per share of US$5.36 (A$8.08) in FY 2023 and then US$4.38 (A$6.60) in FY 2024. Based on the latest Rio Tinto share price of $112.17, this will mean yields of 7.2% and 5.9%, respectively.
In addition to a big dividend yield, Goldman also sees plenty of upside for its shares. The broker currently has a conviction buy rating and $136.20 price target on them. Its analysts explained the reason for their bullish view. They said:
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.
Universal Store Holdings Ltd (ASX: UNI)
Another ASX share that has been tipped to provide a big dividend yield is Universal Store. It is a youth fashion retailer behind brands including Perfect Stranger, Thrills, and (of course) Universal Store.
Morgans is very bullish on the company and is expecting its strong earnings growth to underpin fully franked dividends per share of 30 cents in FY 2023 and 35 cents in FY 2024. Based on the current Universal Store share price of $4.70, this will mean dividend yields of 6.4% and 7.45%, respectively.
As with Goldman and Rio Tinto, Morgans also sees plenty of room for Universal Store's shares to rise from current levels. It has an add rating and $7.00 price target on them. The broker commented:
UNI has opportunities to grow steadily through the rollout of bricks and mortar stores, increased digital penetration and expansion of wholesale channels. While we recognise the general risk around a decline in consumer expenditure on discretionary categories like apparel, we highlight that the youth demographic is likely to be more resilient.
