I’ve got my eyes on some high-quality ASX dividend shares for next month.
It is my belief that good dividend shares can provide a useful combination of long-term capital growth and paying the cash dividend returns as well.
That’s why I like these two, I think they can produce a good mix of returns in the next few years:
WCM Global Growth Ltd (ASX: WQG)
Quality global shares have been savaged in 2022 so far. The inflation and rising interest rates seem to have put some investors off from quality names.
I’m a fan of the WCM investment style, so the 30% drop of the WCM Global Growth share price looks attractive to me.
The WCM investment team look for opportunities that have strengthening competitive advantages, also known as the economic moat. One of the ways that WCM measures this is with a growing return on equity (ROE).
The investment team of the ASX dividend share also look for businesses that have a corporate culture that enables and encourages the competitive advantages to keep growing.
WCM Global Growth also has a growing dividend which is scheduled to rise to an annualised 6.5 cents by FY23. That’s a future dividend yield of 7.6% including the franking credits.
Adairs Ltd (ASX: ADH)
Adairs is one of the interesting retailers on the ASX in my opinion.
The company experienced a strong bump in sales and profit in the first few results after the onset of COVID-19.
However, the booming sales seem to have partly warn off in FY22, partly due to lockdowns.
But, there’s plenty to be positive about in my opinion.
I like the acquisition that the company made with Focus on Furniture. I think that Adairs will be able to grow this business’ store network and online sales.
The ASX dividend share is continuing to grow its membership base as well as its overall store floor area. Both of these factors are helpful for the long-term growth of sales.
Costs could also be reduced with the national distribution centre becoming fully operational. This can also help the business be more efficient with managing inventory and stockflow, and also fulfilling online orders.
It’s hard to say exactly what the dividend will be in the future. The FY23 dividend could be quite a bit better than FY22. So, I’ll just say what the last 12 months of dividends amounts to, in percentage terms. Including the franking credits, Adairs has a trailing dividend yield of 11%.