Morgans names 2 high yield ASX dividend shares to buy now

Here are two highly rated dividend shares…
The post Morgans names 2 high yield ASX dividend shares to buy now appeared first on The Motley Fool Australia. –

Are you looking for some quality dividend shares to buy in December? If you are, then you may want to look at the two high yield dividend shares listed below.

Here’s why Morgans is bullish on them:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is Adairs. It is the leading homewares and furniture retailer behind the Adairs and online-only Mocka brands.

The company has also just signed an agreement to acquire Focus on Furniture for $80 million. Focus currently operates 23 stores across Australia and generated revenue greater than $150 million during FY 2021.

The team at Morgans is positive on the deal. It believes it will complement its core business and provide network expansion opportunities. In response, the broker retained its add rating and lifted its price target on the company’s shares to $4.80.

The broker is also forecasting fully franked dividends per share of 23 cents in FY 2022 and 29 cents in FY 2023. Based on the current Adairs share price of $3.57, this will mean yields of 6.4% and 8.1%, respectively.

Morgans commented: “We believe ADH is too cheap for the growth and dividend income it offers. On our estimates, it trades on a single digit PE multiple of less than 9x in FY23. The forecast dividend yield in that year is 8.0%.”

BHP Group Ltd (ASX: BHP)

Another ASX dividend share for investors to look at is this mining giant.

While recent weakness in the BHP share price has been disappointing for investors, analysts at Morgans believe this could be a buying opportunity. The broker has recently put an add rating and $45.70 price target on the company’s shares.

As for dividends, the broker is forecasting fully franked dividends of $3.40 per share in FY 2022 and $2.44 per share in FY 2023. Based on the current BHP share price of $39.95, this will mean yields of 8.5% and 6.1%, respectively.

Morgans commented: “While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.”

The post Morgans names 2 high yield ASX dividend shares to buy now appeared first on The Motley Fool Australia.

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More reading

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Could the BHP (ASX:BHP) dividend be set for a boost?

Brokers say these 2 top ASX shares are buys in December 2021

BHP (ASX:BHP) share price struggled on Monday despite acquisition talks ‘progressing’

These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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