There are plenty of options for income investors on the Australian share market.
In order to narrow things down, I have picked out a couple of ASX 200 dividend shares that Goldman Sachs rates as buys. Here's what the broker is saying about them:
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BHP Group Ltd (ASX: BHP)
The first ASX 200 dividend share for income investors to look at is BHP.
Goldman Sachs is very positive on the company due to its attractive valuation and favourable commodity mix. The broker commented:
We remain bullish on BHP's commodity mix: With iron ore fundamentals supportive into 2Q23, copper on growing deficits even with global growth risks and metallurgical coal on constrained global supply growth.
Overall, the broker is expecting this to allow the mining giant to pay investors some very generous dividends in the coming years.
It is forecasting fully franked dividends of US$2.05 (A$3.12) per share in FY 2023 and US$1.63 (A$2.48) per share in FY 2024. Based on the current BHP share price of $42.07, this will mean dividend yields of 7.4% and 5.9%, respectively.
Goldman currently has a buy rating and $49.00 price target on its shares.
Westpac Banking Corp (ASX: WBC)
Another ASX 200 dividend share that Goldman Sachs is positive on is banking giant Westpac.
Goldman believes that Westpac is the top bank share to buy right now even though it recently abandoned its cost reduction target. This is because its analysts believe that Westpac's cost base will remain largely flat, which is a great result in this inflationary environment. It explains:
Despite WBC walking away from its FY24E cost target of A$8.6 bn, we expect a broadly flat cost trajectory over the next two years, which will see WBC outperform peers in this relatively difficult inflationary environment.
The broker expects this to allow the bank to pay fully franked dividends per share of 140 cents in both FY 2023 and FY 2024. Based on the current Westpac share price of $20.60, this will mean yields of 6.8% in both years.
Goldman currently has a buy rating and a $24.67 price target on the bank's shares.
