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Leading brokers name 3 ASX dividend shares to buy

When it comes to dividends there are countless options for investors to choose from on the Australian share market.

There are so many it can be hard to decide which ones to buy. To narrow things down I have picked out three dividend shares that brokers think investors should buy this month:

Costa Group Holdings Ltd (ASX: CGC)

According to a note out of UBS, its analysts have retained their buy rating and $5.20 price target on this horticulture company’s shares. Although the broker notes that mushroom prices have been weak and there is a risk of Costa falling short of its calendar year guidance, it remains positive on its earnings growth over the next few years. For next year the broker is forecasting a 14 cents per share dividend in FY 2020, which implies a forward fully franked 4% dividend yield. Whilst I do like Costa, I think another guidance miss could cause its shares to crash lower. In light of this, I would suggest investors hold tight and wait to see if a better entry point emerges in the coming months.

Suncorp (ASX: SUN)

Analysts at Citi have retained their buy rating and $14.50 price target on this insurance and banking giant’s shares following its decision to offload its Capital SMART and ACM Parts businesses to AMA Group Ltd (ASX: AMA). According to the note, Citi believes that a decline in repair volumes means that this is a good move from Suncorp. Outside this, it likes Suncorp due to its valuation and dividend yield. In respect to the latter, it has forecast an 69 cents per share dividend in FY 2020, which equates to a fully franked 5.1% dividend yield. Whilst I’m not a big fan of insurance shares, Suncorp could be worth a closer look.

Westpac Banking Corp (ASX: WBC)

A note out of Credit Suisse reveals that its analysts have retained their outperform rating and $30.55 price target on this banking giant’s shares. According to the note, the broker remains bullish on Westpac despite its belief that it will need to raise capital to achieve a CET1 ratio of 11%. It expects the bank to raise $2 billion of capital through a partially underwritten dividend reinvestment plan and has also suggested that a half year dividend cut to 84 cents per share will be on the cards. Based on its forecast of a full year dividend of 168 cents per share in FY 2020, Westpac’s shares offer a forward fully franked 5.9% dividend yield. I agree with Credit Suisse that Westpac is a buy for income investors.

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James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.