ASX dividend share QBE Insurance Group Ltd (ASX: QBE) posted its half-year results last week, and the market's reaction has been positive.
After a brief sell-off, shares are nearly 1% higher, and the session finished on Wednesday at $16.18 apiece.
At this price, the stock is offering a 4.45% trailing dividend yield.
With investors showing interest in the stock, QBE could be a standout ASX dividend share. But is it worth adding to your portfolio right now? Let's see what the experts think.
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ASX dividend share to outperform?
Following its half-year numbers, brokers have chimed in with their opinions on the insurance giant's investment outlook.
Analysts at Goldman Sachs are bullish on the ASX dividend share, highlighting several factors that could make this insurer a compelling investment.
It has a $20 price target on the ASX dividend share, resulting in roughly 24% upside potential over the next 12 months if correct. Morgans also rates it a buy, with an $18.73 price target.
For context, the S&P/ASX 200 Index (ASX: XJO), a good measure of the Australian market, has historically returned an average of around 10% per year. Goldman's target is roughly double this rate.
The broker points out that QBE's underlying trends are "very positive", passing on rate increases that outpace cost inflation. This is crucial for maintaining profitability in the insurance sector.
Goldman also expects QBE to pay dividends per share of US 54 cents in FY24 (AUD 81 cents), rising to US 57 cents (AUD 86 cents) the year after.
These projections translate to dividend yields of 5% and 5.3%, respectively, at the current share price.
In total, if QBE hits Goldman's targets, it will result in an approximate 28% return over the next year.
Consensus also rates the ASX dividend share a buy, according to CommSec.
Looking to the future
In its half-year results, the insurer reported a 100% increase in net profit after tax to US$802 million, with gross written premium (GWP) up 1.9%.
QBE's guidance for FY25 now includes a combined operating ratio of ~93.5%, with GWP growth of 3% for the year.
The company's CEO, Andrew Horton, highlighted the strategic steps taken to reduce earnings volatility. This was especially true in North America. The ASX dividend share is now "more future-focused", Horton says.
Foolish takeaway
QBE's recent dip could present a tactical buying opportunity for income-focused investors. Experts say the stock offers a compelling mix of income and growth.
The company's improving fundamentals, combined with positive broker ratings, make it a solid contender in the ASX dividend space.
