'Attractive numbers': Expert names ASX dividend share to buy right now

This consumer goods stock is looking cheap and is likely to hand out a nice dividend yield. What more could you want?

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One ASX company that was a huge "COVID beneficiary" is holding onto those customers as Australia moves past the pandemic.

That's the opinion of Shaw and Partners portfolio manager James Gerrish, who revealed that consumer goods conglomerate Metcash Limited (ASX: MTS) is sitting comfortably in his income portfolio.

"Metcash definitely dominates in the rural market place but it also performed strongly in the major cities during COVID as people shifted from large supermarkets to the more convenient community supermarkets of IGA," he said in a Market Matters Q&A.

But the post-pandemic slowdown is much slower and shallower than expected.

"This transition is slowly being reversed as COVID takes a backseat to almost all news stories," said Gerrish.

"However, the original transition to Metcash has been pretty resilient despite the economic reopening over the last 24 months, highlighting the stickiness of the consumer."

Cheap with big dividend payouts

This stickiness is reflected in the Metcash share price, with it remaining almost flat over the past 6 months, even as recession fears buffet other consumer goods stocks.

This is all while paying out a chunky 5.7% dividend yield.

Both the stock price and income are genuine lures for investors, according to Gerrish.

"Current expectations have the stock trading on a 12.1x FY23 valuation while it [is] estimated to pay a dividend yield of around 6.7% fully franked over the next 12-months," he said.

"These attractive numbers are why it resides in our Market Matters Income Portfolio."

The Motley Fool's Tristan Harrison is also a fan of Metcash shares as a cheaper alternative to its giant supermarket rivals.

"Metcash can benefit from ongoing store rollouts, improvements in its logistics and online offerings, and scale advantages," he said earlier this month.

"I think that Metcash's earnings — like food and liquor — can be resilient even in a downturn, so I think it could be a smart pick at today's price."

The broader professional investment community is somewhat divided on Metcash shares.

According to CMC Markets, three out of six analysts currently rate the stock as a buy.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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