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Brokers name 3 ASX dividend shares to buy to beat the rate cuts

When it comes to dividend shares there are countless options for investors to choose from on the ASX. Which certainly is fortunate with rates going down to record lows.

But with so many to choose from, 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:

Coles Group Ltd (ASX: COL)

According to a note out of the Macquarie equities desk, it has upgraded this supermarket operator’s shares from a neutral rating to outperform with a $17.20 price target. The broker made the move on valuation grounds following a recent pullback in its share price. It believes this has dragged its shares down an attractive level. Especially given the quality of the company and its positive start to the second half. Macquarie estimates that Coles will pay a fully franked 55.5 cents per share dividend in FY 2020. This equates to a forward 3.7% dividend yield.

JB Hi-Fi Limited (ASX: JBH)

Analysts at Morgans have upgraded this retailer’s shares to an add rating with a $40.66 price target. According to the note, the broker believes JB Hi-Fi is a good option for investors during these volatile times due to its defensive qualities. It also likes the company due to its ability to deliver like-for-like sales growth in difficult trading conditions and was impressed with the growth of its online business. Morgans has forecast a fully franked FY 2020 dividend of $1.54 per share. This is equal to a forward dividend yield of 4.3%.

Super Retail Group Ltd (ASX: SUL)

A note out of Credit Suisse reveals that its analysts have upgraded this diversified retailer’s shares to an outperform rating with a $9.94 price target. The broker was pleased with Super Retail’s performance in the first half and is impressed with the digital side of the business. And although it was disappointed with the performance of the BCF business, its overall contribution is not great enough to concern the broker. Overall, it believes Super Retail is well-placed for solid growth over the medium term. Credit Suisse expects Super Retail to pay dividend of 50.5 cents per share in FY 2020. This works out to be a forward yield of 6.3%.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. 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.