Investors are expecting significant dividends in 2022 from two particular ASX dividend shares.
Companies have the ability to declare large dividends for shareholders. Dividends are paid from previous profits generated, so they can provide cash returns in periods of market volatility.
These two ASX dividend shares are expected to pay large dividend yields in FY22, according to experts:
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New Hope Corporation Limited (ASX: NHC)
New Hope is one of the largest coal miners in Australia. It's currently benefiting from high coal prices.
It's currently rated as a buy by the broker Morgans, with a price target of $3.40. Morgans was impressed by the recent FY22 half-year result, which included a much bigger-than-expected dividend.
The broker thinks the high coal prices will help the cash flow and the dividend in the second half.
In that half-year result, this ASX dividend share said the realised price for its coal was 147% higher. Operating cash flow was 626% higher to $453 million and underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 583% to $554 million.
New Hope grew its interim dividend by 325% to 17 cents per share and also declared a special dividend of 13 cents per share.
Morgans thinks the New Hope share price offers a grossed-up dividend yield of 21% in FY22 and then 17% in FY23.
At the time of writing, the New Hope share price is up 2.09% at $3.42.
Adairs Ltd (ASX: ADH)
Adairs is one of the country's largest retailers of homewares and furniture. It operates three different businesses: Adairs, Mocka, and Focus on Furniture.
In the first half of FY22, Adairs suffered from the COVID-19 impacts of closed stores. Despite that setback, this ASX dividend share still managed to achieve growth in a number of non-financial areas that could help profit grow into the long-term.
Adairs said that growing store floor space through new and up-sized stores will continue to drive store sales. In the 12 months to December 2021, Adairs store floorspace increased 8.6%.
Management also explained that Linen Lover membership growth is a key driver of sales. Linen Lover members account for more than 80% of total Adairs sales and spend around 1.5x more than non-members with each transaction. Each new member reportedly adds around $400 of total sales. It aims to grow memberships by at least 10% per annum. In the 12 months to December 2021, the membership total rose 10% and it's getting close to one million members.
The ASX dividend share also recently acquired Focus on Furniture and its national distribution centre is now operational.
It's currently rated as a buy by Morgans, with a price target of $3.50. Morgans thinks the business has good potential.
Morgans thinks Adairs is going to pay a grossed-up dividend yield of 9% in FY22 and 12.3% in FY23.
In morning trading today, the Adairs share price is down 0.5% at $2.995.
