Insights

2 ASX dividend shares that could be solid additions for income investors

Adairs is one of the ASX dividend shares to consider.
The post 2 ASX dividend shares that could be solid additions for income investors appeared first on The Motley Fool Australia. –

There are a number of ASX dividend shares that may be worthwhile options to consider for investment income.

Businesses in the retail sector often trade on lower price/earnings ratios (p/e ratios) which helps increase the dividend yield on offer.

Here are two of the ASX dividend shares that may be worth considering:

Adairs Ltd (ASX: ADH)

Adairs is a leading retailer of homewares and furnishings.

Looking at the dividend estimate on Commsec, Adairs is projected to pay a grossed-up dividend yield of 8.4% in FY22.

FY21 saw a lot of growth by the business. Group sales increased 28.5%, whilst Adairs online sales went up 33.2%. Profitability also significantly increased. The Adairs underlying gross profit margin went up 520 basis points to 66.7% and group underlying earnings before interest and tax (EBIT) grew 97.3% to $109.1 million.

Adairs is looking to lower costs and fulfil customer demand more efficiently with its new completed DHL-operated national distribution. An annualised cost savings of around $3.5 million per year is expected from this change.

The ASX dividend share is also looking to grow sales. Management believe there is a relationship between store sales and retail floor space. Adairs says that each additional square metre typically adds around $4,000 in store sales. It’s expecting to grow floor space by at least 8% in FY22 and at least 5% per annum in the following five years through new and upsized stores.

It’s also aiming to accelerate its digital transformation and grow online sales through additional investment in customer acquisition, customer experience, its platform and team.

Accent Group Ltd (ASX: AX1)

Accent is one of the leading retailers of footwear in Australia with numerous brands including The Athlete’s Foot, Stylerunner, Glue, PIVOT and The Trybe.

The company is planning a wide-ranging rollout of stores. For example, around 20 Stylerunner stores are expected to be trading by early 2022 and it’s aiming to have at least 60 stores within the next three years. Online delivery to the USA, Singapore and Hong Kong was launched in July.

Glue has/had 22 stores at the last count. Four more stores are planned to open before Christmas and 60 stores are planned by December 2023.

Accent says that it continues to be defined by strong cash conversion and the consistent strong returns it delivers on shareholder funds. In FY21 it grew its total dividend per share by 21.6% year on year to 11.25 cents.

In FY22 the ASX dividend share is expected to pay a grossed-up dividend yield of 5.1% and in FY23 it’s projected to pay a grossed-up dividend yield of around 7% according to Commsec.

Whilst lockdowns have been impacting store sales, digital sales continue to grow. In a trading update in the three weeks before its FY21 result release, Accent saw digital sales grow by 66.7%.

Management also said that the company “remains in a strong position with a flexible and resilient business model, a database of 8.4 million contactable customers, a strong balance sheet and conservative gearing levels.”

It’s continuing to invest in new stores, its digital capabilities and new business formats.

The post 2 ASX dividend shares that could be solid additions for income investors appeared first on The Motley Fool Australia.

Should you invest $1,000 in Accent right now?

Before you consider Accent, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Accent wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Brokers name 3 ASX dividend shares to buy now

2 buy-rated ASX dividend shares

These were the 5 best performing ASX retail shares in October

2 ASX shares that could be buys in November 2021

2 excellent ASX dividend shares named as buys

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!