There are two main ways that the ASX share market can deliver returns for investors – capital growth and dividends. What if there are some ASX dividend shares that are expected to deliver dividends and potentially grow in value?
Experts sometimes provide dividend estimates for what they think businesses are going to pay to shareholders. Some businesses are expected to pay low dividend yields, while others can be quite large. Sometimes the predicted grossed-up dividend yield can be above 10%.
Despite the recent volatility, these two ASX dividend shares have experts predicting attractive total returns.
Perpetual Limited (ASX: PPT)
This business is a fund manager. Perpetual's total assets under management (AUM) was $97.9 billion at 31 March 2022. It also had $1.05 trillion of funds under administration (FUA) with its Perpetual Corporate Trust.
The business boasts that its funds are generating strong investment performance with 92% of Barrow Hanley strategies and 75% of Australian equity strategies outperforming their benchmarks over three years.
Perpetual is currently rated as a buy by the broker Citi, with a price target of $40.80. That implies a potential rise of more than 40% over the next year.
The ASX dividend share says that it's going to continue to take a "disciplined focus on both organic and complementary inorganic investment opportunities… supported by a strong balance sheet, and a track record of positive execution and improvement in net flows".
Based on Citi's estimates, the broker values the Perpetual share price at 10x FY23's estimated earnings. Citi suggests it has a potential grossed-up dividend yield of 11% in FY23.
Monash IVF Group Ltd (ASX: MVF)
This ASX dividend share describes itself as a leading provider of assisted reproductive and specialist women's imaging and diagnostic services in Australia and South-East Asia. It says it's a driving force in developing assisted reproductive technologies.
Monash IVF's latest update showed why the company believes that "underlying IVF demand is growing and its strategic initiatives will enable it to take advantage of this demand".
The company said that new IVF patient registrations in the financial year to April were "strong". It had growth of 5.2% compared to the prior corresponding period. Monash IVF says this provides a "solid platform" for growth in FY23.
However, the business said that the current environment has negatively impacted stimulated cycle activity and profitability between January 2022 and April 2022. That's as patients defer treatment due to contracting COVID-19 or being a close contact. Further, the company has a medical policy delaying treatment for patients who have contracted COVID-19 for eight weeks after recovery. This has created pent-up demand, which Monash IVF expects to service in the future.
The company expects the FY22 adjusted net profit after tax (NPAT) before certain non-regular items to be approximately $22 million subject to any further COVID-19 impacts.
The broker Macquarie currently rates it as a buy with a price target of $1.20. That implies a possible rise of more than 20%.
Based on an expected improvement of profit in FY23, Macquarie values the Monash IVF share price at 15x FY23's estimated earnings and a potential grossed-up dividend yield of 6.8%.
