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Date : 27/08/2022

3 ASX Dividend Stocks for This Week

The ASX is home to some excellent dividend stocks, which may provide you with a reliable source of income stream and growth in value over time. A wide variety of high-quality companies on ASX are committed to returning profits to their shareholders.

If a business makes enough money and has a good cash flow, it can pay dividends to its shareholders if it wants to. For example, a low price-to-earnings (P/E) ratio plus a high dividend payout ratio may indicate that a company’s stock is offering a high dividend yield.

Investors prefer to receive a sizeable portion of their annual return as dividends. Money in the bank is always welcome, but it’s gratifying when, after the first investment, there’s hardly any additional effort to maintain it.

Following are the three recommended buy dividend stocks.

  1. GQG Partners Inc. (ASX: GQG)
  2. Westpac Banking Corp (ASX: WBC)
  3. Elders Ltd (ASX: ELD)

GQG Partners Inc. (ASX: GQG)

GQG Partners Inc. (ASX: GQG) is global asset management engaged in active equity portfolios. The firm is in the business of advising investors and managing their money.

The company just released its FY22 half-year results, which showed a 23% growth in average funds under management (FUM), a 21.3% increase in net revenue to US$222.7 million, and an 18.3% increase in net operating income to US$174.2 million.

As much as 90% of its taxable profit will be distributed to shareholders as dividends. First-half FY22 resulted in distributable earnings of US$133.3 million.

GQG proudly announced that performance fees contributed less than 3% of revenue in the first half. It anticipates more fee stability in times of market turbulence with asset-based fees.

Despite a challenging market environment, ongoing industry withdrawals, and overall negative market returns, GQG recorded positive net inflows of US$6.3 billion over half.

According to CMC Markets’ projections, GQG’s dividend yield will be 12.5 cents per share yearly. At today’s price of $1.66 a share, it means a forward dividend yield of 7.8% in the fiscal year 2023.

GQG Partners ASX

Westpac Banking Corp (ASX: WBC)

One of Australia’s “Big 4” banks, Westpac Banking Corp (ASX: WBC), will benefit from rising interest rates. Higher rates mean high Net Interest Margins, leading to higher profitability.

Its exposure to rising rates and its ambitious cost-reduction initiatives make it a potentially attractive investment opportunity. The sum of these factors ought to be beneficial to future dividend and earnings growth.

The Goldman Sachs group assumes this to be true. The stock of Australia’s oldest bank was recently given a buy rating and a $26.12 price target by the firm.

According to the firm’s research, “WBC provides excellent leverage to rising rates” and “will also see the advantage of higher rates play through its NIM quicker than peers.” Even while the broker doesn’t think Westpac can cut its cost base by $8 billion as planned, it thinks a cut of $8.9 billion is possible, which would still be an 18% drop.

The broker believes that the fully franked dividends per share will be 123 cents in FY 2022 and 135 cents in FY 2023, considering the above facts.

At today’s price of $21.48 for a share of Westpac stock, these dividend yields work out to 5.75 and 6.3%.

Westpac Banking Corp ASX

Elders Ltd (ASX: ELD)

Elders Ltd is an agriculture firm that provides various services to rural and regional consumers across the ANZ area. The company’s stock is traded under the symbol ELD on the Australian Stock Exchange.

The company has made remarkable progress after a challenging period in the last few years. As a result, the company’s profits have skyrocketed. The first-half operating income increased 80% to $132.8 million in the current reporting season.

Fortunately, Goldman Sachs does not share Elders’ pessimism and predicts additional growth for the company soon. The broker also likes the firm because of its “excellent track record,” “solid industry structure,” “potential for positive earnings surprise,” and “attractive value.”

The ELD stock has a buy rating from Goldman Sachs and a $21.00 price target.

It also expects dividends per share of 50 cents in FY 2022 and 53 cents in FY 2023. At $11.52 apiece, this would imply a 4.3% and 4.6% yield for Elders.

Elders Ltd ASX

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