If you're in the market for some ASX dividend shares, then it could be worth taking a look at the two listed below.
Here's why brokers have just tipped them as buys:
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APM Human Services International Ltd (ASX: APM)
The first ASX dividend share that could be a buy is international health and human services provider, APM.
Analysts at Goldman Sachs are very positive on the company and are forecasting solid earnings growth through to at least FY 2025. This is something the broker feels the market under appreciates at present. It explains:
We believe the market is under appreciating APM's ability to generate sustainable earnings growth (GSe 14% EPS CAGR, FY22-25E). This will be driven by: 1. Ramp up of the new Workforce Australia contract; 2. Potential upside from DES as APM continues to gain share from underperforming providers; 3. Gain in scale in the significant NDIS/Allied Health opportunity; 4. Recent successful contract wins highlight the opportunity for APM to scale in other regions outside Australia, supporting our view that the company can sustain double digit earnings growth over the medium term.
As for income, Goldman is forecasting dividends per share of 10 cents in FY 2023 and 11 cents in FY 2024. Based on the current APM share price of $2.09, this equates to yields of 4.8% and 5.25%, respectively.
The broker also sees significant upside potential with its buy rating and $3.75 price target.
Lottery Corporation Ltd (ASX: TLC)
Another ASX dividend share that could be a top option for investors is this lottery company. Particularly in the current uncertain economic environment where defensive qualities are highly prized by the market.
The team at Citi is positive on the company for this reason. In addition, the broker highlights that recent price increases and third-party commission cuts could have a significant impact on Lottery Corp's margins. It said:
The Lottery Corporation (TLC) lottery earnings can be volatile depending on jackpots but are defensive over time with no correlation to the business cycle. We expect last year's Oz Lotto changes to result in a material revenue lift as the jackpot sequence normalises. We believe the market underestimates the uplift to the contribution margin following the increase in the commission rate and cut to third party digital commissions. The potential introduction of cashless gaming in NSW is unlikely to drive higher wallet share for lotteries given international experience and differing player profiles between EGMs and lotteries.
As for dividends, the broker is forecasting a 15 cents per share dividend in FY 2023 and 18 cents per share dividend in FY 2024. This will mean fully franked yields of 3% and 3.6%, respectively.
Citi has a buy rating and $5.70 price target on its shares.
