Fortunately, in this low interest rate environment, there are countless dividend shares for investors to choose from on the Australian share market.
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 ASX dividend shares that brokers think investors should buy:
Metcash Limited (ASX: MTS)
According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on this wholesale distributor's shares to $4.03. Goldman was pleased with Metcash's latest strategy update, which highlighted a shift in its strategy to a growth footing. In addition to this, it notes that management has flagged its strong capital position by increasing its dividend payout ratio. In light of the latter, Goldman is now forecasting fully franked dividends of 19 cents per share in FY 2021 and 18 cents per share in FY 2022. Based on the current Metcash share price of $3.49, this will mean yields of 5.4% and 5.15%, over the next couple of years.
Telstra Corporation Ltd (ASX: TLS)
Analysts at Ord Minnett have recently upgraded this telco giant's shares to a buy rating with a $4.05 price target. According to the note, the broker believes Telstra is well-placed to benefit from the 5G rollout due to its superior network. In addition to this, it believes its shares are good value and offer an attractive yield. Ord Minnett expects Telstra to continue paying a 16 cents per share dividend over the next couple of years. Based on the current Telstra share price of $3.25, this will equate to a fully franked 4.9% dividend yield.
Westpac Banking Corp (ASX: WBC)
A note out of Citi reveals that its analysts have retained their buy rating and $26.00 price target on this banking giant's shares. According to the note, the broker believes there is scope for the banking sector to continue to outperform as more investors rotate into bank shares due to rising bond yields and their improving outlooks. Citi is expecting Westpac to pay $1.30 per share fully franked dividends over the next couple of years. Based on the Westpac share price of $24.66, this will mean a generous 5.3% yield.
