Top broker names 2 ASX dividend shares to buy

Coles Group Ltd (ASX:COL) and this ASX dividend share are rated as buys by a leading broker. Here's what you need to know…

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Fortunately, in this low interest rate environment, the Australian share market has plenty of options for investors looking to generate a passive income.

Two dividend shares that have recently been named as buys are listed below. Here's what you need to know about them:

Coles Group Ltd (ASX: COL)

This supermarket operator has been performing very strongly over the last 12 months. This has been driven by a very favourable shift in consumer behaviour during the pandemic. 

And while the tailwinds it has been experiencing are easing and growth will be hard to come by in the second half of FY 2021, analysts at Goldman Sachs remain positive on the company.

They recently reiterated their buy rating and $20.70 price target on its shares. Goldman is positive on Coles' medium term outlook thanks to its strong market position, Refreshed Strategy, and focus on automation.

The broker is forecasting a 62 cents per share dividend in FY 2021 and then a 67 cents per share dividend in FY 2022. Based on the current Coles share price, this represents fully franked 3.9% and 4.2% yields.

Integral Diagnostics Ltd (ASX: IDX)

Another ASX dividend share that Goldman Sachs is a fan of is Integral Diagnostics. It operates a total of 72 radiology clinics across Australia, including 26 comprehensive sites.

Integral Diagnostics has been growing strongly and has continued this positive form in FY 2021. For the six months ended 31 December, the company delivered a 29.5% increase in revenue to $170.7 million and a 61.1% lift in net profit after tax to $23.2 million.

Goldman Sachs is confident there will be more of the same in the future. It notes that Integral Diagnostics is a well-run business in an attractive industry, with a relatively secure volume profile of mid/high single digit growth. In addition to this, the broker sees opportunities for the company to accelerate its growth through developments and acquisitions.

Its analysts currently have a buy rating and $5.50 price target on the company's shares. They are also expecting Integral Diagnostics to pay fully franked dividends of 11.4 cents, 13.9 cents, and 15.4 cents per share over the next three years. Based on the latest Integral Diagnostics share price of $4.74, this represents yields of 2.4%, 2.9%, and 3.25%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Integral Diagnostics Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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