Dividend income is always welcome, but over time inflation can chip away at the purchasing power it generates for you.
This is why it can be very important to invest in ASX dividend shares that also increase their payouts over time.
And while the current economic environment is challenging for many companies, not all are struggling. In fact, some appear well-placed for big dividend increases in 2023.
Here's are two ASX dividend shares tipped to grow their dividends strongly next year:
Mineral Resources Ltd (ASX: MIN)
Thanks to booming iron ore and lithium prices, this mining and mining services company has been tipped to increase its dividend materially in 2023.
As a reminder, in FY 2022, Mineral Resources paid a $1.00 per share dividend to its shareholders.
According to a note out of Goldman Sachs, its analysts expect Mineral Resources' EBITDA to more than triple in FY 2023 and for its dividend to follow suit.
Goldman has pencilled in a fully franked dividend of $4.37 per share next year. Based on the current Mineral Resources share price of $81.85, this will mean a 5.3% dividend yield for investors.
The broker has a buy rating and $94.00 price target on its shares.
QBE Insurance Group Ltd (ASX: QBE)
Another ASX share that could be poised to make a big increase to its dividend next year is insurance giant QBE.
Thanks to a winning combination of premium rate increases, cost outs, and rising bond yields, QBE is expected to be in a position to almost double its dividend, according to analysts at Morgans.
A recent note reveals that its analysts are expecting a 42 cents per share dividend for the 12 months ending 31 December 2022. After which, it is forecasting an 83% increase in QBE's dividend to 77 cents for FY 2023. Based on the current QBE share price of $13.24, this will mean yields of 3.2% and 5.8%, respectively.
Morgans also sees decent upside potential for its shares with its add rating and $14.89 price target.
