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:
BHP Group Ltd (ASX: BHP)
According to a note out of Macquarie, its analysts have retained their outperform rating and $57.00 price target on this mining giant's shares. This follows the release of a third quarter update that the broker thought was solid. Overall, it believes BHP is well-positioned to deliver on its guidance and benefit from sky high iron ore prices. This is expected to result in strong earnings and bumper dividends. Macquarie is forecasting fully franked dividends of $3.51 per share in FY 2021 and $2.97 per share in FY 2022. Based on the latest BHP share price of $47.56, this represents yields of 7.4% and 6.2%, respectively.
Wesfarmers Ltd (ASX: WES)
Another note out of Macquarie reveals that its analysts have retained their outperform rating and $56.60 price target on this conglomerate's shares. The broker appears to have been pleased with the company's Kmart update. It believes that the focus on private label expansion and online sales will drive growth in the coming years. Particularly given its modest share of an enormous addressable market. Macquarie expects fully franked dividends of $1.63 per share and $1.51 per share for the next two years. Based on the current Wesfarmers share price of $55.70, this will mean yields of 2.9% and 2.7%.
Westpac Banking Corp (ASX: WBC)
Analysts at Morgans have retained their add rating and lifted the price target on this banking giant's shares to $28.50. According to the note, the broker believes Westpac and the rest of the big banks could surprise to the upside when they release their next updates in the coming weeks. In addition, Morgans has upgraded its earnings forecasts for the coming years to reflect lower credit impairment assumptions. As for dividends, the broker is forecasting $1.37 per share in FY 2021 and $1.49 per share in FY 2022. Based on the latest Westpac share price of $25.12, this equates to fully franked yields of 5.5% and 5.9%, respectively.
