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:
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Infomedia Limited (ASX: IFM)
According to a note out of Credit Suisse, its analysts have retained their outperform rating and lifted their price target on this automotive software company's shares. This follows news that it has agreed to acquire SimplePart for up to US$45 million. The broker sees a lot of positives in the acquisition and expects it to be accretive to earnings from FY 2022. Looking ahead, Credit Suisse is forecasting dividends of 4.1 cents per share in FY 2021 and 5.9 cents per share in FY 2022. Based on the latest Infomedia share price of $1.59, this will mean fully franked yields of 2.6% and 3.7%, respectively.
Nick Scali Limited (ASX: NCK)
A note out of Citi reveals that its analysts have retained their buy rating and $12.05 price target on this furniture retailer's shares. The broker was pleased with Nick Scali's trading update and notes that trading conditions appear stronger than expected. Based on this and the booming housing market, it feels its FY 2022 forecasts are very conservative. And while it expects Nick Scali's earnings to decline next year after a bumper FY 2021, it still feels its shares are attractively priced. Furthermore, they offer generous yields in a low interest rate environment. Citi is forecasting dividends per share of 80 cents and 48.6 cents over the next two years. With the Nick Scali share price currently fetching $10.31, this will mean fully franked yields of 7.8% and 4.7%, respectively.
Transurban Group (ASX: TCL)
Analysts at Macquarie have retained their outperform rating and $14.51 price target on this toll road operator's shares. According to the note, the broker points out that traffic on its roads has been improving since the start of the year. Positively, it feels an improving economic environment is supporting a recovery in road traffic and expects further improvements to come. Particularly as domestic tourism increases and supports traffic on its roads connecting with airports. Macquarie is expecting Transurban to pay a 40.2 cents per share distribution this year and then a 52.1 cents per share distribution in FY 2021. Based on the current Transurban share price of $14.05, this will mean yields of 2.9% and 3.7% for investors over the next two years.
